Finance Minister P. Chidambaram on Tuesday said that while the Government was open to suggestions on dual pricing for diesel, it would be difficult to charge a market price for luxury cars and subsidised price for transport trucks at the same petrol pump.

“We have knocked our heads together to see if it is possible to have dual prices of diesel at the same retail petrol pump outlet,” he said replying to supplementaries during Question Hour in the Rajya Sabha.

He said the government had an open mind on the issue and was ready to consider suggestions on implementing dual pricing policy for diesel, provided that two different rates did not lead to black marketing.

The Petroleum and Natural Gas Ministry had introduced market rates for bulk diesel consumers last month, raising the price of diesel by Rs. 10 per litre for bulk consumers. Reacting to demands for allowing state road transport corporations to buy subsidised diesel, Mr. Chidambaram said having dual rates for bulk and retail consumers was a policy decision taken in order to keep the diesel subsidy at reasonable levels. Members stated that state public transport corporations were finding it difficult to buy diesel at market rates.

The Finance Minister said central taxes on petrol and diesel had come down between 2007 and 2012. Central excise duty on petrol had come down from Rs. 14.66 a litre (as on March 1, 2007) to Rs. 9.46 (as on September 14, 2012), while the same on diesel had declined from Rs. 4.69 a litre to Rs. 3.56 per litre.

Mr. Chidambaram said while the Government garnered Rs. 95,349 crore in 2011-12 through customs and excise levy on petroleum products, state governments together collected more in taxes than the Centre this fiscal.

The Centre's take from these levies in 2010-11 was Rs. 1,02,827 crore and during April-December period current fiscal it was Rs. 71,818 crore, he said. “The taxes charged on mainstream petroleum products and the revenue collected from customs and excise duties on petro products has been generally declining for the last three years. The government has, during recent times, shifted to specific rate of excise duty from ad valorem rate to protect consumers when the prices go high,” he added.

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