New Delhi: The Centre has sharply reduced excise duty on petrol to ₹3 per litre and completely removed duty on diesel, in a move aimed at easing pressure on oil marketing companies amid rising global crude prices.
According to a Finance Ministry notification issued on March 26, excise duty on petrol has been reduced from ₹13 per litre to ₹3 per litre, while the ₹10 per litre duty on diesel has been brought down to nil with immediate effect.
The decision is expected to support state-run fuel retailers such as HPCL, BPCL and IOC, which have been under strain due to rising international oil prices.
Despite a nearly 50% surge in global crude oil prices since February 28, domestic retail prices of petrol and diesel have largely remained unchanged, putting financial pressure on these companies.
The spike in crude prices followed military tensions involving Iran, the United States and Israel, which pushed oil rates to around $119 per barrel earlier this month before stabilising near $100 per barrel.
Rating agency ICRA said that if crude prices remain in the range of $100–105 per barrel, oil retailers could incur losses of about ₹11 per litre on petrol and ₹14 per litre on diesel.
The duty cut is aimed at cushioning these losses and maintaining price stability for consumers amid global volatility.
