In a significant move aimed at easing pressure on the fuel sector, the Centre on Friday reduced excise duty on petrol and diesel by ₹10 per litre each. Following the revision, central taxes on petrol now stand at ₹3 per litre, while excise duty on diesel has been brought down to zero.
Despite the sharp reduction, consumers are unlikely to see a corresponding drop in fuel prices at petrol pumps. Industry insiders suggest that the relief will largely be absorbed by Oil Marketing Companies (OMCs), which are currently grappling with substantial losses.
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OMCs are estimated to be losing around ₹48.8 per litre on every litre of petrol and diesel sold. These losses have been driven by the steep rise in global oil prices, with Brent crude surging past the $100 per barrel mark following escalating tensions involving the United States, Israel, and Iran, as well as disruptions in the Strait of Hormuz.
Petroleum Minister Hardeep Singh Puri, in a detailed post on X, highlighted the scale of the global price spike. He noted that crude oil prices have jumped from about $70 per barrel to nearly $122 per barrel within a month.
“Consequently, petrol and diesel prices for consumers have gone up all over the world,” Puri stated, adding that fuel prices have risen by 30–50% in Southeast Asia, around 30% in North America, 20% in Europe, and up to 50% across African countries.
The government’s decision is seen as an attempt to balance domestic fuel supply stability while cushioning OMCs from the impact of volatile global energy markets, even as consumers continue to bear the brunt of high prices.
(This story is published from a syndicated feed)
