New Delhi, Mar 2 (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 amid the pandemic.

Sources said that the Finance Ministry has been urged to take a call on the high levels of duty on the two petroleum products as its higher prices also has an impact on inflation that has fallen to 4.06 per cent in January but has the potential to rise further.

The news of a successful Covid-19 vaccine and production cut by oil rich countries has suddenly firmed up global oil prices that gained over $ 10 per barrel since January hover close to $ 65 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 two month by oil marketing companies taking petrol and diesel prices to touch new highs.

In Mumbai, petrol is priced 97.57 a litre on Tuesday very close to reaching Rs 100 a litre. In other metro cities also the pump price of petrol has breached all time high levels and in some places petrol isd already priced at over Rs 100 a litre.

Taxes, duties and commission on petrol comprise over 200 per cent of the base price of the product that as of March 1 (in Delhi) stayed at Rs 33.26 a litre. The excise component is around 100 per cent of the base price while state level VAT is roughly about 65 per cent of the base price. With regard to diesel, while the base price Rs 34.97 a litre in Delhi, excise duty component is Rs 31.80 a litre and VAT Rs 11.94 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 would only look at this option later this month when crude price stabilises. It is understood that finance ministry has taken note of rising fuel prices and iumpact of central duty on it and may take appropriate action soon.

The Covid-19 pandemic and stimulus measure announced by the government to tide over the current economic crisis has already overstretched government finances with exercise now to see new 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.