Guwahati: The centre has announced a reduction in the special additional excise duty (SAED) on crude petroleum, effective immediately.
The SAED on crude petroleum has been lowered to Rs 6,700 per tonne. This decision marks a change from the previous rate of Rs 7,100 per tonne, which was established during the last fortnightly review on August 14th.
In addition to this adjustment, there are other changes in excise duties related to petroleum products. The SAED, or duty, on the export of diesel will see an increase from Rs 5.50 per litre to Rs 6 per litre.
Furthermore, the duty on aviation turbine fuel (ATF), commonly known as jet fuel, will be doubled from Rs 2 per litre to Rs 4 per litre, and this change will come into effect on the following Saturday.
It's worth noting that the SAED on petrol remains unchanged and continues to be at nil.
Explainer
Now, let's delve into how these changes in special additional excise duty can impact oil prices and the broader economy:
Consumer Prices: Changes in excise duty can directly influence the prices of petroleum products like diesel and aviation fuel. An increase in duties can lead to higher prices for consumers, affecting not only individual vehicle owners but also industries reliant on transportation, such as logistics and manufacturing.
Inflation: The price of petroleum products has a cascading effect on various sectors of the economy. Any increase in fuel costs can contribute to inflationary pressures, potentially impacting the overall cost of living.
Government Revenue: Special additional excise duties are an important source of revenue for the government. By adjusting these duties, the government can manage its income from the petroleum sector. Decreasing duties may reduce government revenue, while increasing them can lead to higher collections.
Economic Impact: The petroleum sector plays a crucial role in the Indian economy. Any changes in duties can have repercussions on the profitability of oil companies, investments in the energy sector, and overall economic growth.
Energy Policy: Excise duty adjustments can also be used as a policy tool to encourage or discourage certain behaviors. For example, a government may reduce duties on cleaner fuels to promote their use and curb pollution.
Global Oil Prices: The prices of crude oil in the international market are a significant factor in determining the retail prices of petroleum products in India. While SAED is a domestic duty, it can still be influenced by fluctuations in global oil prices.
In summary, changes in special additional excise duty on petroleum products can have a multifaceted impact, affecting consumers, government revenues, inflation, and the broader economy. These adjustments are often made in response to various economic and policy considerations, and their consequences are closely monitored by stakeholders in the energy sector and the general public.
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