New Delhi: In its bid to shore up the rupee, the Centre is likely to impose higher import duties on precious stones, certain types of steel and electronics but will spare gold to prevent smuggling, a finance ministry official was quoted as saying in a Reuters report.
The official, who didn’t want to be named, said the main reason for the planned increase in duties was to restrict the inflow of items displaced by escalating U.S.-China trade tension. The government is also trying to curb imports of “non-essential” items to support the rupee.
With petrol and diesel prices scaling record highs, S&P Global Ratings Monday said the government may opt to control retail fuel prices to cushion inflationary shocks. Almost 80 per cent of crude oil is imported by India. Rising crude prices and the recent 10 per cent slide in the rupee has translated into higher fuel prices for consumers. Among the other steps being planned to shore up the rupee, the Centre is also considering cutting oil purchases to soften the blow from high crude oil prices.
S&P Global Ratings said the government may opt to control retail fuel prices to cushion inflationary shocks. India imports almost 80 per cent of its crude oil requirements. Rising crude prices and the recent 10 per cent slide in the rupee has translated into higher fuel prices for consumers.
“This puts pressure on consumers and results in higher inflation, a sensitive subject, given the impending federal and state elections over the next 12 months,” S&P’s Vishal Kulkarni said.
“We don’t expect any reversion to the subsidy mechanism similar to before 2014 in India, even though the incumbent government may opt to control retail fuel prices, using other means, to cushion the inflationary shocks,” Kulkarni added.
The US-based agency said it assumes a Brent crude oil price per barrel of $70 for the rest of 2018, $65 for 2019, and $60 for 2020, against the current spot price of almost $80 per barrel in our financial projections.
Petrol price Monday crossed the Rs 90-mark in Mumbai, while it was at Rs 82.72 per litre in Delhi. Diesel at IOC’s outlets in Mumbai costs Rs 78.58 a litre, while in Delhi the fuel costs Rs 74.02 a litre.