The move is aimed at easing pressure on oil marketing companies, which have been absorbing higher costs due to global price volatility.
Fuel Price Relief: Govt Cuts Petrol Excise to Rs 3, Diesel Duty Scrapped Amid Crude Surge
Amid rising crude oil prices triggered by tensions in West Asia, the Indian government has moved to cushion the impact on consumers by sharply reducing excise duty on fuel, even as retail prices remain unchanged for now.
The move is aimed at easing pressure on oil marketing companies, which have been absorbing higher costs due to global price volatility. Analysts had warned that sustained crude prices above USD 100 per barrel could significantly widen losses for fuel retailers if pump rates were not revised.
In a notification issued on March 26, the Ministry of Finance said excise duty on petrol has been reduced to Rs 3 per litre from Rs 13, while diesel has been fully exempted from excise duty, down from Rs 10 per litre. The revised rates took effect immediately.
The decision comes against the backdrop of supply concerns linked to the Strait of Hormuz, a crucial route through which a large share of India’s energy imports pass. The country depends on imports for about 88 percent of its crude oil needs.
Following the announcement, shares of Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited opened higher.
Private retailer Nayara Energy has raised fuel prices, while others have kept rates steady.
(With Inputs from PTI)
