Centre's Diwali bonanza to bring down petrol diesel prices. Check new rates

The Indian government on the eve of Diwali has announced that it has slashed the excise duty on fuels. Excise duty on petrol has been slashed by ₹5, while diesel will be cheaper by ₹10, effective from Thursday, November 3.

This move comes at a time when petrol and diesel prices are at a record high across the country. Also, it comes as a major relief for the motorists after a long period of incessant hikes in both petrol and diesel prices.

Till Tuesday, petrol and diesel prices were increased for seventh consecutive days. On Wednesday the price hike rally took a pause. Petrol price on Wednesday in Delhi stands at ₹110.04 per litre, while diesel price is ₹98.42 a litre. In Mumbai, a litre of petrol and diesel is retailing at ₹115.85 and ₹106.62 respectively.

The latest slash in the price of petrol and diesel comes on the back of a reduction at oil prices in the international market on Wednesday. The excise duty on both motor fuels was increased drastically by the central government in 2020 in an attempt to take the benefit of the wide gap between crude oil in the international market and petrol-diesel retail price in India.

While oil price in the international market was low, the central government imposed a high rate of excise duty to fill its coffer. Later on, when oil prices in the international market increased, the oil marketing companies too increased the pricing of petrol and diesel accordingly, taking the prices of both fuels to an all-time high.

The fuel prices in India differ from state to state depending on the VAT rates and freight charges. Other components of the fuel retail price include excise duty and dealers' commission. For both petrol and diesel a litre of fuel price comprises nearly 50 per cent tax combining both central and state government cess.