The government is not thinking about cutting excise duty on petrol and diesel as of now. The rates have not touched the levels that could demand such an action, said Economic Affairs Secretary Subhash Chandra Garg.
State oil firms have not changed petrol and diesel price for around a week now. This comes after petrol price hit a 55-month high of Rs 74.63 per litre and diesel rates peaked to a record high of Rs 65.95.
Oil prices can impact the government's fiscal maths if they result in a spike in rates of domestic cooking gas (LPG) - the only commodity that is subsidised now, said Gard in an interview to a leading press agency.
"Otherwise there is no direct subsidy any longer," he said. "Indirect subsidy/impact comes, if crude oil prices reach a certain level (and) there might by some rethink about excise duty etc. That's not happened so far."
Without indicating the level of oil prices that could trigger an excise duty cut, he said, "If the level (of prices now) does not go up, there is no reason (for excise duty cut)."
Each rupee cut in excise duty on petrol and diesel will cost a revenue loss of Rs 13,000 crore.
Asked if there is any thinking of cutting excise duty or asking PSU oil firms to hold rates till elections in Karnataka, he said, "We have not seen anything (on it)."
The central government levies Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel.
The government is hoping for geopolitical tensions to ease a bit as that would help ease oil prices that are near three-year high.
"Fundamental reasons, to my mind, don't exist for oil prices to go up further from both demand and supply situation," Garg said.
The recent spurt may have been because of stock drawdowns, trade tensions and geopolitics around Syria and Korea.
"I think demand-supply situation is also turning alright. I think those (geopolitical issues) are also getting out of the way. So I don't expect prices to go up further and that's why I said ideally it should come down," he said.
Oil firms, owned by the States, kept petrol and diesel rates unchanged for the sixth consecutive day.
The government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell.
The Centre had earlier asked states to lower the VAT, but only four states (Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh) reduced the rates, whereas the others ignored the call.
Duty on petrol rate was hiked by Rs 11.77 per litre and Rs 13.47 per litre on diesel, in the 15 months that assisted government’s excise mop up more than double to Rs 2,24,000 crore in 2016-17.