Government Hikes Excise Duty on Petrol-Diesel by Rs 2 per Litre, Will retail prices go up?

Government hikes Excise Duty on Petrol-Diesel by Rs 2 per Litre

The government has hiked the excise duty on petrol and diesel by Rs 2 per litre. The government has taken this decision amid the ongoing fluctuation in global oil prices and Trump’s tariffs. “The central government has increased excise duty on petrol and diesel by Rs 2-2 per litre,” a notification issued by the revenue department said.

The excise duty on petrol has been hiked by Rs 13 per litre and by Rs 10 per litre on diesel. Retail consumers need not panic as the Ministry of Petroleum and Natural Gas has informed that there will be no increase in retail prices of petrol and diesel after the increase in excise duty rates today.

Retail prices in Delhi

In Delhi, the price of petrol today stands at ₹94.77 per litre, while diesel is priced at ₹87.67 per litre. According to the notification issued, the central government has increased the excise duty in public interest under Section 5A of the Central Excise Act, 1944, and Section 147 of the Finance Act, 2002.

In recent days, a decline in international crude oil prices had raised hopes of a reduction in retail prices of petrol and diesel. However, with the hike in excise duty, such a reduction now seems unlikely.

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.#MoPNG

— Ministry of Petroleum and Natural Gas #MoPNG (@PetroleumMin) April 7, 2025

Statement from the Petroleum Minister

Union Petroleum and Natural Gas Minister Hardeep Singh Puri said, “You must have seen a notification of the Finance Ministry stating that excise duty on petrol and diesel is being increased by Rs 2. Let me make it clear on record in advance that the burden will not be passed on to the consumers. The international price of crude oil has come down to around $60 per barrel, but please remember that our oil marketing companies hold stocks for a period of 45 days. If you go back to January, the price of crude oil at that time was $83, which later came down to $75. So the crude oil stock that they have is on an average $75 per barrel. You can expect oil marketing companies to cut petrol and diesel prices in line with global prices. In a regulation free zone, you can expect them to adjust the market retail price accordingly.

Foreign exchange worth Rs 1,20,000 crore saved

A few days ago, Petroleum and Natural Gas Minister Hardeep Singh Puri had said that the Ethanol Blended Petrol (EBP) programme has led to immediate payment of over Rs 1,04,000 crore to farmers from 2014-15 to January 2025, besides saving of over Rs 1,20,000 crore in foreign exchange. In the ethanol supply year (ESY) 2013-14, ethanol blending in petrol was 38 crore litres which increased to 707 litres in 2023-24 as a result of incentives given by the Government. Shri Puri informed that during the current ESY 2024-25, for the month of February 2025, PSU OMCs have achieved 19.68 per cent ethanol blending target.