Amid a sharp rise in global crude oil prices, the Government of India has reduced excise duty on petrol and diesel by ₹10 per litre. However, consumers will not see an immediate drop in fuel prices at petrol pumps.
No Change in Retail Petrol and Diesel Prices
The government has clarified that retail prices of petrol and diesel will remain unchanged despite the duty cut.
The decision has been taken primarily to offset the heavy losses faced by Oil Marketing Companies (OMCs) and ensure uninterrupted fuel supply across the country.
Crude Oil Prices Rise Sharply Due to West Asia Tensions
According to official data, crude oil prices have surged significantly over the past month—from around $70 per barrel to $122 per barrel—largely due to ongoing geopolitical tensions in West Asia.
This sharp increase has put pressure on domestic fuel pricing and supply chains.
Oil Companies Facing Heavy Daily Losses
Currently, oil companies are incurring losses of approximately:
- ₹26 per litre on petrol
- ₹81.90 per litre on diesel
Overall, this translates into a daily loss of nearly ₹2,400 crore.
The ₹10 excise duty cut is expected to partially absorb these losses, enabling companies to maintain stable supply without increasing retail prices.
Government Chooses to Absorb Burden Instead of Price Hike
Hardeep Singh Puri stated that the government had two options—either increase fuel prices or bear the financial burden.
He said the government chose the latter to protect citizens from rising fuel costs and inflation.
Export Tax Imposed on Diesel to Ensure Domestic Supply
To maintain adequate domestic availability, the government has also imposed a levy on diesel exports.
This move will help ensure sufficient fuel supply within the country and allow authorities to curb exports if needed during high-demand periods.
Government Monitoring Global Situation Closely
The government has assured that it is closely monitoring global developments and will take further steps if required to maintain price stability and ensure energy security.
