Petrol Price: Government Makes Big Cut In Excise Duty On Petrol And Diesel, Will Fuel Prices Reduce?
The government has reduced special additional excise duty on petrol from ₹13 to ₹3 per liter and on diesel from ₹10 to nil. This reduction is expected to reduce fuel prices. The decision has been taken due to the global energy crisis and geopolitical tensions, with an aim to reduce cost pressure on oil companies. A new levy structure has also been introduced on ATF, and fuel export regulations have been tightened.
The government has reduced the special additional excise duty on petrol and diesel.
Know the main points and gist of the news at a glance
New Delhi. The government has reduced the special additional excise duty on petrol and diesel. According to Reuters, now the excise duty on petrol has been reduced to Rs 3 per liter instead of Rs 13 per liter. At the same time, excise duty on diesel has been reduced from Rs 10 per liter to zero. This step of the government is expected to reduce the prices of petrol and diesel in the country. Apart from this, the government has also introduced a new levy structure for Aviation Turbine Fuel (ETF). Under these changes, a special additional excise duty of Rs 50 per liter is now imposed on ATF, which is partially compensated through rebates, taking the effective duty under the specific provisions to approximately Rs 29.5 per litre.
Why did the government reduce excise duty?
The move comes against the backdrop of the ongoing conflict between the US and Israel involving Iran and the deepening global energy crisis caused by Tehran's blockade of the Strait of Hormuz. It is an important route carrying about one-fifth of the world's crude oil and gas supplies, estimated at 20–25 million barrels per day.
Before the conflict, India received about 12-15% of its crude oil imports through this vital corridor. This huge cut is expected to reduce cost pressure on oil marketing companies (OMCs) and help mitigate the impact of high global crude prices, which have remained volatile due to geopolitical tensions. Let us tell you that recently the Russian petroleum company Naira present in the country has increased the prices of petrol and diesel yesterday itself. However, other companies have not yet increased the prices of petrol and diesel. Only the prices of premium petrol have been increased.
Also read-Petrol Diesel Price Hike: This company increased the prices, petrol became costlier by ₹ 5 and diesel by ₹ 3 per liter; Prices applicable with immediate effect
The government has also tightened rules relating to fuel exports and withdrawn comprehensive excise duty exemptions previously available on consignments of petrol, diesel and ATF.
Under the revised framework, export-related benefits will now be restricted to specific and clearly defined categories, reflecting a more balanced and restrictive policy stance.