The Indian Oil Corporation is seeking a hike in customs duty on superior kerosene oil imports to 35 per cent from the present 20 per cent.
Chairman M S Ramachandran has raised the demand in a letter to the Union ministry of petroleum and natural gas.
IOC is asking for a hike on two grounds. First the sales of high speed diesel grew by only 0.6 per cent in 2002-03 against the sales in 2001-02.
Second, the SKO imports by private players has increased by 130 per cent to 698 thousand metric tonne in 2002-03 from 301 TMT in 2001-02. Further in April 2003, the SKO imports by private players was 76 TMT.
Ramachandran apprehends that at this rate the SKO imports may cross one million metric tonne in 2003-04.
He has also pointed out that SKO sales through the public distribution system has declined.
"It can therefore be inferred that the imported SKO (non-PDS) is not being actually utilised for the basic purpose that it is being imported for, that is, use by households. It can be further inferred that one of the primary reasons for the significant drop in HSD sales could be due to suspected large scale admixing of HSD with SKO (non-PDS) being imported by the parallel marketers. While some retail outlets may be indulging in admixing of HSD with SKO, we believe that a large number of customers including truck operators are buying SKO (non-PDS) for mixing with HSD." Ramachandran has written in the letter.
He has argued that in view of this, a strong case exists for reducing the incentive available to parallel marketers for importing SKO.
This can be partly achieved by increasing the basic customs duty to the original level of 35 per cent, he has urged.
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