New Delhi: Considering the rise in crude oil prices in the international market, the government on Friday announced a cut of ₹10 per liter in excise duty on petrol and diesel. This reduction has been implemented immediately. The decision is expected to ease pressure on oil marketing companies, so they will not have to raise petrol and diesel prices for now.
The Ministry of Finance, in a notification issued today, stated that the special additional excise duty on petrol has been reduced from ₹13 per liter to ₹3 per liter, and on diesel from ₹10 per liter to zero.
Finance Minister Nirmala Sitharaman wrote in a social media post, “In view of the West Asia crisis, a reduction of ₹10 per liter has been made in central excise duty on petrol and diesel for domestic use. This will protect consumers from price hikes.” She added that Parliament has also been informed about this.
It is noteworthy that due to the West Asia crisis, international crude oil prices have risen, putting pressure on oil companies to increase fuel prices. The excise duty cut provides them some relief.
The March Brent crude futures in the international market are currently down 0.5%, at about $107.5 per barrel. Since the West Asia crisis began, prices have increased by nearly 50%.
This reduction will also apply to exports by public sector oil companies to Nepal, Bhutan, Sri Lanka, and Bangladesh. Additionally, the government has imposed a duty of ₹21.5 per liter on diesel exports and ₹29.5 per liter on aviation fuel exports. The Finance Minister said this will ensure better availability of diesel and aviation fuel in the country.
There has been no change in the special excise duty on exported petrol and diesel. The special excise duty on exported petrol is zero, while for diesel it is ₹18.5 per liter.
After the cut, the basic excise duty on petrol is ₹1.40 per liter, special additional excise duty ₹3, agriculture infrastructure and development cess ₹2.50, and additional excise duty (road & infrastructure cess) ₹5 per liter.
For diesel, the basic excise duty is ₹1.80 per liter, special additional excise duty zero, agriculture infrastructure and development cess ₹4, and special excise duty (road & infrastructure) ₹2 per liter.
Apart from these central taxes, each state and union territory imposes its own VAT on petrol and diesel.
Meanwhile, unbranded petrol and diesel prices remained unchanged on Friday. According to India’s largest oil company, Indian Oil Corporation, petrol prices in the national capital remained at ₹94.77 per liter and diesel at ₹87.67 per liter. Unbranded petrol and diesel prices have not changed since October 30, 2024.
Despite Excise Duty Cut, Petrol and Diesel Prices Remain Unchanged: Pawan Khera
Congress senior leader Pawan Khera criticized the central government on Friday over reports of petrol and diesel price reductions, claiming that consumers have received no real relief despite the recent fiscal changes. In view of the West Asia crisis, the government on Friday reduced central excise duty on petrol and diesel for domestic consumption by ₹10 per liter, stating this move would protect consumers from price hikes. Additionally, a duty of ₹21.5 per liter on diesel exports and ₹29.5 per liter on ATF (aircraft fuel) was imposed.
In a statement, Khera said the headlines claiming a “reduction” in fuel prices are misleading. “If you saw headlines about a ‘reduction’ in petrol and diesel prices and thought the government gave relief to your pocket, you are mistaken because prices for dealers and consumers remain the same,” he said.
He clarified that the government reduced the “special additional excise duty,” a levy on oil marketing companies, rather than the retail price. According to Khera, this does not translate into immediate savings for the public. He said, “What has actually been reduced is the ‘special additional excise duty’—the tax paid by oil marketing companies to the government. The words ‘special’ and ‘additional’ themselves indicate how unnecessary this tax was.”
The Congress leader further pointed out that since the West Asia conflict began, oil companies have been under financial pressure and are absorbing losses without passing them on to consumers. He called the government’s move a delayed and limited step, stating, “The government has merely agreed to share a small portion of this burden, and that too almost a month later.”
He argued that while the measure may provide some relief to oil companies, it does not address the concerns of ordinary citizens facing high fuel prices. He urged the government to prioritize tangible reductions in prices over “artificial headlines.”
Fuel pricing in India has always been a politically sensitive issue, influenced by global crude oil prices, exchange rates, and central and state taxes. While the government occasionally adjusts excise duties, opposition parties often claim that the full benefit of lower crude prices does not reach consumers.
UNI
