Centre planning to abolish 5 per cent Customs duty on crude oil


Friday, March 11, 2011

The Indian Central government is considering a plan to abolish the 5 per custom duty, which is levied on crude oil, if the prices of the commodity keep on rising towards the recent high of June 2008 levels. All the public sector oil companies were hopeful that in union budget of FY 2012 the government will remove the custom duty on oil just like they did in FY 2009 keeping in the mind the increasing prices of oil in the global markets. However, the government said that if the prices of crude oil will keep on increasing, they will take appropriate action. The rising prices of oil products is putting immense pressure on the profitability of domestic oil companies as apart from petrol, the prices of other products like diesel and gas are still controlled by the government. However, implementing this decision would be difficult for the government as duty on crude oil contributes approximately 20 per cent of the revenues generated in custom revenues.

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IOC to get Cairn crude

IndianOil will start processing crude oil produced from Cairn India Ltd’s Rajasthan block at its Panipat refinery in Haryana early next month, a senior official at the state-owned refiner said. “Cairn is scheduled to start injecting the crude into our pipeline today or in couple of days, and it should reach the Panipat refinery in 10 days. So, we are hoping to start processing the crude early next month“, IndianOil director refineries B N Bankapur said. He said Cairn will pump crude from its own pipeline to IndianOil’s 1,174-km Mundra- Panipat pipeline at the latter’s terminal in Radhanpur, Gujarat, to transport it to the Panipat refinery. Cairn recently commissioned its 590-km pipeline from its Rajasthan Block in Thar desert to Salaya in coastal Gujarat, and is already delivering crude to private refineries from the pipeline.
Source: DNA, Mumbai, June 24, 2010

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