New Delhi: Government Monday hiked excise duty on petrol and diesel by Rs 2 per litre each but there will be no change in retail prices as the increase will be adjusted against the price cut that was warranted because of falling international oil prices.
The excise duty on petrol was hiked to Rs 13 per litre and that on diesel to Rs 10 a litre, an official order showed.
The increase in duties will “come into force on the 8th day of April, 2025,” it said.
While any change in taxes are normally passed on to consumers, there will be no change in retail selling price of petrol and diesel as the excise hike will be set off against the reduction in retail prices that was warranted from fall in international oil prices.
International oil prices have slumped to their lowest since April 2021 as escalating trade tensions between the United States and China stoked fears of a recession that could cut oil demand.
Brent futures lost USD 2.43, or 3.7 per cent, to USD 63.15 a barrel on Monday while US West Texas Intermediate crude futures were down USD 2.42, or 3.9 per cent, at USD 59.57.
India is 85 per cent dependent on imports to meet its oil needs.
“PSU Oil Marketing Companies have informed that there will be no increase in retail prices of #Petrol and #Diesel, subsequent to the increase effected in Excise Duty Rates today,” the oil ministry said in a post on X.
The Modi government during its 11-year rule hiked excise duty whenever international oil prices fell.
The government had between November 2014 and January 2016, raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
In all, duty on petrol rate was hiked Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop-up more than double to Rs 2,42,000 crore in 2016-17, from Rs 99,000 crore in 2014-15.
The government had cut excise duty by Rs 2 in October 2017, and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019. It again raised excise duty on March 2020, by Rs 3 per litre each.
Excise duty was raised by Rs 13 and Rs 16 per litre on petrol and diesel between March 2020 and May 2020.
But in the following years, it rolled back the Rs 13 and Rs 16 per litre excise duty hike as international oil prices soared. This helped bring down petrol prices from a record hike of Rs Rs 105.41 a litre in Delhi and highest ever diesel rate of Rs 96.67.
Just before general elections were announced last year, the government had cut petrol and diesel prices by Rs 2 a litre each.
Petrol currently costs Rs 94.77 a lire in Delhi and Rs 87.67 is the price for a litre of diesel.
PTI
