COMMODITY
Government hikes excise duty on petrol, diesel by Rs 2 per litre each
Apr-08-2025

The government has hiked excise duty on petrol and diesel by Rs 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 Rs 13 per litre and that on diesel to Rs 10 a litre. The increase in duties is come into force on the April 08, 2025. 

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

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 Rs 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 Rs 2,42,000 crore in 2016-17, from Rs 99,000 crore in 2014-15.

The government had cut excise duty by Rs 2 in October 2017, and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019. It again raised excise duty on March 2020, by Rs 3 per litre each. Excise duty was raised by Rs 13 and Rs 16 per litre on petrol and diesel between March 2020 and May 2020. But in the following years, it rolled back the Rs 13 and Rs 16 per litre excise duty hike as international oil prices soared. This helped bring down petrol prices from a record hike of Rs 105.41 a litre in Delhi and highest ever diesel rate of Rs 96.67.

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