Petrol, diesel excise duty hiked by ₹2/litre; no change in retail prices

The new excise rates will be ₹13 per litre for petrol and ₹10 per litre for diesel.
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The government on Monday hiked excise duty on petrol and diesel by ₹2 per litre each but there will be no change in retail prices as the increase will be adjusted against the price cut that was warranted because of falling international oil prices.

The excise duty on petrol was hiked to ₹13 per litre and that on diesel to ₹10 a litre, an official order showed.

The increase in duties will “come into force on the 8th day of April, 2025,” it said.

While any change in taxes are normally passed on to consumers, there will be no change in retail selling price of petrol and diesel as the excise hike will be set off against the reduction in retail prices that was warranted from fall in international oil prices.

International oil prices have slumped to their lowest since April 2021 as escalating trade tensions between the United States and China stoked fears of a recession that could cut oil demand.

Brent futures lost $2.43, or 3.7 per cent, to $63.15 a barrel on Monday while US West Texas Intermediate crude futures were down $2.42, or 3.9 per cent, at $59.57.

India is 85 per cent dependent on imports to meet its oil needs.

“PSU Oil Marketing Companies have informed that there will be no increase in retail prices of #Petrol and #Diesel, subsequent to the increase effected in Excise Duty Rates today,” the oil ministry said in a post on X.

The Modi government during its 11-year rule hiked excise duty whenever international oil prices fell.

The government had between November 2014 and January 2016, raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

In all, duty on petrol rate was hiked ₹11.77 per litre and that on diesel by ₹13.47 a litre in those 15 months that helped government’s excise mop-up more than double to ₹2,42,000 crore in 2016-17, from ₹99,000 crore in 2014-15.

The government had cut excise duty by ₹2 in October 2017, and by ₹1.50 a year later. But it raised excise duty by ₹2 per litre in July 2019. It again raised excise duty on March 2020, by ₹3 per litre each.

Excise duty was raised by ₹13 and ₹16 per litre on petrol and diesel between March 2020 and May 2020.

But in the following years, it rolled back the ₹13 and ₹16 per litre excise duty hike as international oil prices soared. This helped bring down petrol prices from a record of ₹105.41 a litre in Delhi and highest-ever diesel rate of ₹96.67.

Just before general elections were announced last year, the government had cut petrol and diesel prices by ₹2 a litre each.

Petrol currently costs ₹94.77 a lire in Delhi and ₹87.67 is the price for a litre of diesel.

Published on April 7, 2025

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