Central government has cut excise duty on domestic petrol and diesel. ₹Finance Minister Nirmala Sitharaman said on Friday that a rebate of Rs 10 per liter will be given to protect consumers from rising international oil prices.
The duty cut will reduce oil companies’ losses on auto fuel without any reduction in pump prices of petrol and diesel.
The government has also imposed duty on the export of diesel. ₹21.5 per liter and aviation turbine fuel (ATF). ₹The Finance Minister said the investment at Rs 29.5 per liter will be made to ensure domestic availability of critical fuel products in the wake of the West Asia crisis, which has seen disruption in global energy supplies.
“In view of the West Asia crisis, central excise duty on petrol and diesel for domestic consumption has been reduced ₹10 per litre. This will provide protection to consumers from rising prices. Honorable. PM @NarendraModi has always ensured that citizens are protected from uncertainties in the supply and cost of essential commodities,” Sitharaman said in a post on X.
Also read:India’s fuel rates affected by Iran war, premium petrol prices increased ₹2
Apart from this, duty has also been imposed on the export of diesel. ₹21.5 per liter and atf ₹29.5 per litre, he said.
“This will ensure adequate availability of these products for domestic consumption. Parliament has been informed about this,” he said.
Benchmark crude oil rose nearly 48.22% to $108.01 a barrel on Thursday, from $72.87 on Feb. 28, before the war broke out in West Asia.
“As me [Middle East] The conflict is close to a month in, its impact on Indian downstream players is more visible, with petrol-diesel accounting marketing margins of OMCs turning negative at -Rs 25/45 per liter this fortnight,” Sabri Hazarika and Arya Patel of MK Global Financial Services Ltd said in a research report.
Petroleum Minister Hardeep Puri said on Friday that oil marketing companies are incurring losses of approx. ₹Rs 24 more per liter on petrol ₹They will get relief by reducing the current duty on diesel by Rs 30 per litre.
MS Mani, partner, Deloitte India, said, “The excise duty cut is timely, coming as a relief not only to OMCs but also to consumers. Unless the government provides relief in excise duty, OMCs will be forced to increase prices.” Yesterday, Naira Enegri, the largest private fuel retail company raised petrol prices ₹5 per liter and by diesel ₹3 of his more than 7,000 pumps, partly to offset his losses. HT reported this on Friday.
“In the last 1 month, international crude oil prices have increased from around $70/barrel to around $122/barrel. As a result, petrol and diesel prices for consumers have increased all over the world. Prices have increased by around 30%-50% in South East Asian countries, 30% in North American countries, 20% in Europe and 50% in African countries,” Puri said in a social media post.
He said, “Modi government had two options – either drastically increase prices for Indian citizens as all other countries have done or bear the brunt of it on its own finances so that Indian citizens are spared from international instability. Honorable Prime Minister @NarendraModi ji, in keeping with his government’s commitment over the last 4 years since the start of the Russia-Ukraine conflict, has decided to again take a hit on its own finances to protect Indian citizens.”
He said the government has taken a huge hit to its taxation revenues to ensure that huge losses of oil companies are reduced at a time of skyrocketing international prices.
“At the same time, export tax has been imposed because international prices of petrol and diesel are skyrocketing and any refinery exporting to foreign countries will have to pay export tax. My gratitude to Hon’ble Prime Minister Narendra Modi ji and Hon’ble Finance Minister @nsitharaman ji for this timely, bold and visionary decision!”