The government had cut customs duty on crude oil imports to zero from 5 per cent in June 2011 when rates zoomed to over USD 100 per barrel. But with oil prices hovering at USD 30 a barrel now, the duty may be back, official sources said.

As the government looks to shore up its revenue without hurting economic growth, reimposing import duty on crude oil presents a viable alternative the Budget 2016-17 to be presented on February 29, the sources said.

Alongside, customs duty on petroleum products, petrol and diesel may also be increased in equal proportion to duty levied on domestic refiners.

Petrol and diesel currently attract 2.5 percent import duty. This duty differential is maintained so as to protect domestic industry by making import of product costlier as compared to domestic manufacturing.

If import duty on crude oil is raised in the budget for 2016-17, it would go up on allied products too from 2.5 percent to 7.5 percent, sources said.

At USD 30 per barrel crude oil price, 5 per cent customs duty will fetch the government close to Rs 18,000 crore at current levels of imports.

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