Seeking a cut in duties on branded petrol and diesel that offer better mileage and help cut fuel consumption, Petroleum and Natural Gas Minister, Veerappa Moily on Wednesday sought notification of “Fuel Economy’’ norms for passenger cars within this year.

In a statement issued here, Mr. Moily said Ministry of Power should notify “Fuel Economy’’ norms for passenger cars within this year. It said Mr. Moily will shortly convene a meeting of all stakeholders to discuss the modalities of developing and bringing these norms into effect given the fact that countries like the US and China have already announced ambitious targets.

The Petroleum Ministry has already approached the Ministry of Urban Development with the offer of funding ‘free cycles scheme’ in select cities to cut down on fuel consumption. It will also be approaching Chief Ministers of all States with a similar offer so that cities which come forward with such schemes can be provided resources by the oil companies to implement such projects.

Referring to the levy of higher excise duty on premium or branded petrol and diesel, making them costlier than normal or unbranded auto fuel, Mr. Moily said while a litre of regular/normal or unbranded petrol costs Rs. 72.45 per litre in Delhi, branded petrol is priced at Rs. 81.88 per litre. Similarly, normal diesel in Delhi costs Rs. 52.54 per litre while branded diesel is priced at Rs. 67.93 per litre.

“To enhance the fuel efficiency of new generation vehicles, specialised products (branded petrol and diesel) were launched by oil marketing companies in line with global trends and in keeping with the technological advancement in the automobile industry," the statement said. The Petroleum Ministry also completed on Wednesday the one-month of fuel conservation drive. In September last year, the government stopped providing subsidy on branded fuel, resulting in further dip in sales. The current unbranded or normal diesel price of Rs. 52.54 per litre includes a subsidy of Rs. 9.20.

He urged the Finance Ministry to review the duties levied on branded fuels to bring down the price differential so that consumers opt for branded fuel and this will help improve the fuel efficiency (by about 2 per cent) resulting in reduction in overall demand for petroleum products," the statement said.

Currently, the government levies an excise duty of Rs. 1.20 per litre on normal or unbranded petrol while the same on branded petrol is Rs. 7.50. Similarly, unbranded diesel attracts an excise duty of Rs. 1.46 per litre while Rs. 3.75 duty is levied on branded diesel. “The reduction in excise duty by Rs. 6.30 per litre on petrol and Rs. 2.29 on diesel would not impact government revenues as current sale of branded fuels was meagre. But it would help in conservation as these fuels provide improved engine performance to yield 2 per cent savings in consumption,’’ the statement quoting Mr. Moily said.

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