The state-owned oil companies have decided to postpone passing on the 2 per cent education cess on excise duty on transportation fuels, motor spirit and high speed diesel, by a week, till July 16, when the next round of price revision becomes due.
The oil companies have ruled out any price revision of superior kerosene oil and liquefied petroleum gas in near future.
On account of the education cess on the excise duty on petrol, the fuel price is likely to go up by 30 paise a litre and HSD by at least 8 paise a litre.
However, the oil companies have earlier passed on the increase in price on products such as naphtha, light diesel oil, furnance oil and bitumen to customers with immediate effect.
Besides, compressed natural gas will also be costlier. "The cess on excise duty is just a part of the levy. The CNG compressor and dispensing units which are imported will also attract the duty, two per cent cess on corporate tax as well as service tax going up will have an overall effect on the prices," say a top brass with a leading natural gas marketing company.
Oil companies revise product rates in tandem with international prices every fortnight and the next revision is scheduled on July 16.
A senior executive with a state-owned oil company said, "It is not possible to have two successive price revision in a week (July 8 and July 16) and so we have decided to wait for a week. We will take a decision on July 16 when we meet for our price revision. It is now a matter of time when we pass on the cess burden to the consumers of petrol and diesel."
The proposed revision is crucial as the oil companies will have to decide on prices in the backdrop of a highly volatile crude oil prices globally and with the educational cess levied on the excise duty leviable goods.
"We might have to take the overall scenario, the trend in the global crude prices and whether we can offer a stable price to our customers by absorbing price hike within our marketing margins," another oil executive pointed out.
Finance minister P Chidambaram levied an education cess of 2 per cent on excisable goods manufactured in the country.
Meanwhile, the oil companies will enter into "a final discussion" on the issue of price band with the petroleum and natural gas ministry.
The government is keen on giving pricing flexibility to the oil companies within a band of anywhere between Re 1 and Rs 2 a litre.Powered by 
More from rediff