Petrol, diesel excise duty cut by Rs 10; Will Fuel Prices Reduce?

New Delhi: Amidst the ongoing war in West Asia and skyrocketing crude oil prices, the central government has taken a major decision. The Finance Ministry has significantly cut excise duty on petrol and diesel. This decision will keep retail petrol and diesel prices stable, while curbing the massive losses being incurred by state-owned oil marketing companies (OMCs).

Did government cut excise duty by Rs 10 per litre?

According to a notification issued by the Ministry of Finance on Thursday, excise duty on petrol and diesel for domestic consumption has been reduced by Rs 10 per liter.

Excise duty on petrol has been reduced from Rs 13 per litre to Rs 3 per litre. Excise duty on diesel has been reduced from Rs 10 to zero (0).

The ministry clarified that this duty reduction is effective immediately.

Did Crude oil prices surge by 50 per cent?

Union Petroleum and Natural Gas Minister Hardeep Singh Puri informed on the social media platform that in the last one month, crude oil prices in the international market have increased from $70 per barrel to around $122 per barrel.

"International crude prices have gone through the roof in the last 1 month from around 70 dollars/barrel to around 122 dollars/barrel. Consequently, petrol and diesel prices for consumers have gone up 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," he said.

Prices have increased by about 50 percent since the start of the conflict between US-Israel and Iran on February 28. 

Due to this global crisis, fuel has become expensive all over the world. Prices have increased by 30 per cent to 50 per cent in South East Asian countries and Africa. There has been a jump of 30 per cent in North America and 20 per cent in Europe. 

Despite the high international oil prices, retail prices of petrol and diesel in India have remained stable. 

Oil companies like Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL), and Indian Oil (IOC) were bearing the brunt of this.

According to Minister Hardeep Singh Puri, the companies were incurring huge losses of approximately Rs 24 per liter on petrol and Rs 30 per liter on diesel. 

Will it be a 'safety shield' for the common man?

Union Finance Minister Nirmala Sitharaman wrote on X that the move was taken in light of the West Asia crisis. 

In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by Rs 10 per litre each. This will provide protection to consumers from rise in prices. Hon. PM Narendra Modi  has always ensured that citizens are protected from vagaries of supply and costs of essential goods. Further, duties have been imposed on exports of Diesel at Rs 21.5 per litre and on ATF at Rs 29.5 per litre. This will ensure adequate availability of these products for domestic consumption. The Parliament has been notified about the same," she said