Date:24/05/2008 URL: http://www.thehindu.com/2008/05/24/stories/2008052461630100.htm

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Deora seeks duty cut on crude

Sujay Mehdudia

Meets Prime Minister and stresses need to protect oil marketing companies

NEW DELHI: Petroleum and Natural Gas Minister Murli Deora on Friday met Prime Minister Manmohan Singh and sought a cut in customs duties on import of crude and reduction in excise duty on petrol and diesel.

The crude prices skyrocketed to $135 a barrel on Thursday and the Indian crude basket touched a record $125.

Mr. Deora sought readjustment of duties to offset some of the impact of the high global prices and provide a cushion to the oil marketing companies (OMCs) against financial bankruptcy on account of under-recoveries, thanks to subsidised sale of petroleum products in retail.

The meeting came on the heels of a session Mr. Deora had with the heads of the OMCs in the morning. “The heads of the OMCs informed me that they had not imposed any kind of freeze on release of new LPG connections, nor was any quota fixed for LPG cylinders for consumers,” the Minister said. Asked what he discussed with the Prime Minister, Mr. Deora said he apprised Dr. Singh of the situation caused by the continued volatility in crude prices.

Dr. Singh also told Mr. Deora that he had asked his Principal Secretary to convene a meeting of the Finance and Petroleum Secretaries to narrow down the differences.

Official sources said the Petroleum Ministry had sought zero per cent customs duty on crude against the present five per cent and reduction in excise duty on petrol and diesel, but the plea was not accepted by Finance Minister P. Chidambaram.