New Delhi: The Government of India on Thursday reduced excise duty by ₹10 per litre on both petrol and diesel with immediate effect, in a move aimed at cushioning consumers and public sector oil marketing companies (OMCs) from the sharp surge in global crude oil prices.
Despite the duty cut, retail prices at fuel stations will remain unchanged, as the benefit is being used to offset mounting under-recoveries faced by OMCs—Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.
The decision comes amid a steep rise in international crude oil prices, which have jumped from around USD 70 per barrel to nearly USD 122 per barrel in the past month, driven by geopolitical tensions in West Asia and disruptions in global supply chains.
Officials said OMCs are currently incurring under-recoveries of about ₹26 per litre on petrol and ₹81.90 per litre on diesel, with total daily losses estimated at ₹2,400 crore. The excise duty reduction is expected to partially ease this burden and ensure uninterrupted fuel supply across the country.
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, said the government opted to absorb the financial impact rather than pass on the burden to consumers. He stated that the Centre has taken a hit on its revenues to protect citizens from global price volatility.
In a parallel move, the government has imposed an export levy on diesel to discourage outbound shipments and prioritise domestic availability. The measure comes at a time when international diesel prices remain elevated, making exports more lucrative for refiners.
Officials said the twin measures are aimed at maintaining price stability in the domestic market while ensuring adequate fuel supply. They noted that, unlike many countries where fuel prices have risen sharply in recent weeks, India has kept retail prices steady, albeit at a significant fiscal cost.
The government said it will continue to closely monitor global energy trends and take necessary steps to safeguard consumer interests and ensure supply stability.
PIB
