Excise duty on petrol, diesel cut, retail rates unchanged

The Government has cut excise duty on petrol and diesel by INR 10 per litre to shield consumers from rising global oil prices, even as crude surged past $100 per barrel amid geopolitical tensions. The reduction-offsetting steep under-recoveries faced by oil marketing companies-will not lower retail fuel prices, which have remained unchanged since April 2022.

To balance revenue loss and ensure domestic supply, export duties of INR 21.5 per litre on diesel and INR 29.5 per litre on aviation turbine fuel have been reintroduced. Officials said the move discourages excessive exports by refiners and prioritizes domestic availability.

India, which imports nearly 88 per cent of its crude, has avoided sharp fuel price hikes seen globally, where rates have risen up to 50 per cent in some regions. However, oil firms continue to incur heavy losses, estimated at INR 24-INR 30 per litre.

The duty cut is expected to cost the exchequer over ?7,000 crore in the short term, while export levies may yield partial gains. The Government said it chose to absorb the fiscal burden rather than pass costs to consumers, while continuing to monitor volatile global energy markets.