The levy will, however, be confined to crude produced from domestic fields.
One way the government is considering to reduce the pressure on consumers is by introducing a windfall tax on local oil producers, to be activated in case global prices exceed US$70 a barrel.
The tax could be used in two ways - as a subsidy to fuel retailers for absorbing the hikes and not passing them on to consumers or compensation to the government if it cuts the excise duty. This may be accompanied by a minor tinkering with excise duty rates to give immediate relief to consumers. The discussion will have Prime Minister's Office, Oil Ministries, the Finance and state-owned oil marketing companies. The UK in 2011 raised the tax rate to be applied to North Sea oil and gas profits when the price is above $75 per barrel.
In Norway, companies drilling for North Sea oil pay 78 per cent tax rate on the income compared with a corporate tax rate of 28 per cent. Australia had similarly imposed a 22.5 per cent "super profits" tax on coal and iron ore producers after a boom in the prices of coal and iron ore earlier in this decade, which it later withdrew after protests.
Sources said the windfall tax is one of the options being considered by the government as a permanent solution to dealing with the problem of spike in oil prices.
Apple rejects Steam Link app for iOS citing "business conflicts"
Announced earlier this month , the app lets you stream games from your Steam library on PC over to your iPhone or iPad . The team here spent many hours on this project and the approval process, so we' re clearly disappointed.
Petrol and diesel prices were raised for the 11th day in succession today as the state-owned oil firms gradually passed on to the consumer the increased cost of worldwide oil that had accumulated since a 19-day freeze was imposed just before Karnataka elections. The officials of the finance ministry issued a statement regarding the same.
In such a precarious scenario, where inflationary trends may rear its head at any time, Pradhan's attempts at restoring normalcy has been rather hollow even if the call for including petrol and diesel in GST is not for him to make. If Odisha government cuts its Value-Added Tax, the fuel price will come down.
The dealers are asked to cut a part from their commissions and they will be reimbursed by the oil marketing firms.
The Union Minister said the Centre had cut excise duty on fuel by Rs 2 in October a year ago.
In the event the government reduces excise tax by ₹10 and reverts to the pricing level of the UPA era, it will have a negative impact on the fiscal deficit and funding for social welfare programmes will dry up hurting the poor, Dr. Shenoy added. States may not be willing to allow that because taxes on fuel account for 11% of their overall tax revenue.