The finance ministry is unlikely to effect duty rationalisation for the oil sector during the current fiscal as demanded by the petroleum ministry.
This has put a question mark on the proposed dismantling of the administered price mechanism (APM) in the petroleum sector by April 1, 2002.
Sources said the issue of duty reduction was discussed by the finance ministry at a recent meeting convened by finance secretary Ajit Kumar. It was pointed out that the exercise could not be undertaken during the current fiscal as tax collections were already at a historic low.
In case the duties are not rationalised during the current year and international prices of crude oil continue to rule at around $27 a barrel, the petroleum ministry has estimated the oil pool deficit to cross Rs 19,000 crore by March 31, 2002.
Finance ministry officials are, however, of the view that any cut in duty rates will aggravate the government
