New Delhi, February 26, 2010: Petrol prices are expected to increase by Rupees 2.71 per litre and those of diesel by Rupees 2.55 per litre from midnight Friday following Finance Minister Pranab Mukherjee's budget that restored basic duty on petrol, diesel and crude petroleum as well as raised central excise duty by Rupeee 1. In his 2010-11 budget speech11, Mukherjee said that with oil prices rising alarmingly to about $112 per barrel last year the government had exempted fuel from basic customs duty to give relief to oil marketing companies.

But, with global prices comparatively lower right now, the government had taken the step to improve the fiscal position by restoring basic duty and increasing excise duty.

"In view of the pressing need to move back to a fiscal consolidation path, I propose to restore the basic duty of 5 percent on crude petroleum; 7.5 percent on diesel and petrol and 10 percent on other refined products.

I also propose to enhance the Central Excise duty on petrol and diesel by Re.1 per litre each," said Mukherjee.

According to ministry sources, this translates into an increase of Rs.2.71 per litre for petrol and Rs.2.55 percent per litre for diesel.

A notification is expected soon to formally mark the upward revision of the prices.

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