New Delhi, Dec 14 (IANS): Various stakeholders have urged the government to cut excise duty on petrol and diesel to rescue consumers from the spiralling prices of the auto fuels amidst the pandemic.

Sources said that the Finance Ministry has been urged to take a call the high levels of duty on the two petroleum products as the higher prices also has an impact on inflation that is already running above the Reserve Bank of India's comfort level at 6.93 per cent in November.

The news of a successful Covid-19 vaccine has suddenly firmed up global oil prices that gained over $10 per barrel to hover close to $50 a barrel now. What this has done is that it has put pressure on petrol and diesel prices that have been raised consistently for past month by oil marketing companies taking petrol prices very close to all-time high levels.

In Mumbai, petrol is priced 90.34 a litre on Monday, very close to all time high level of Rs 91.34 reached on October 4, 2018. In other metro cities also, the pump price of petrol is close to all time high levels.

Taxes, duties and commission on petrol comprise over 200 per cent of the base price of the product that as of December 1 (in Delhi) stayed at Rs 26.34 a litre. The excise component is over 120 per cent of the base price while state level VAT is roughly about 70 per cent of the base price.

With regard to diesel, while the base price Rs 27.08 a litre in Delhi, excise duty component is Rs 31.83 a litre and VAT Rs 10.64 a litre.

"The high level of taxes along with current firming of global oil market has played havoc for auto fuel consumers in the times of the pandemic. The Finance Ministry should look at reducing excise duty on the two products so that retail price eases in the time of high volatility," said a representative of the oil industry that has recommended for a cut in excise duty on petroleum products.

While the case for a cut in duty on petrol and diesel has been made, sources indicated that government is not looking at the option at this juncture as it has limited fiscal space available to take any dent in revenue collections. The Covid-19 pandemic and stimulus measure announced by the government to tide over the current economic crisis has already overstretched government finances that are looking at avenues to boost revenue while cutting down on non-critical expenditure.

In May, the Centre had substantially raised excise duty on petrol and diesel to mobilise additional resources that would go into funding its Aatmanirbhar Bharat Package. In fact, the Centre has kept room for further raising excise duty on the two products in case the situation warranted.