Excise duty on petrol, diesel hiked, prices not to rise
To boost the exchequer's finances and help contain fiscal deficit — the amount of money that the government borrows to fund its expenses — the Centre on Thursday hiked the excise duty on both petrol and diesel by ₹ 1.50 per litre.
The move will not result in any increase in retail prices of the fuels as state-owned oil companies would offset the hike against an anticipated retail price reduction due to falling global oil prices.
Trending CarsFind More Cars
The duty hike will boost government revenue by about ₹ 13,000 crore on an annual basis.
Excise duty on normal or unbranded petrol was hiked from ₹ 1.20 per litre to ₹ 2.70 per litre and unbranded diesel from ₹ 1.46 a litre to ₹ 2.96, a government notification said.
On branded petrol, it was raised from ₹ 2.35 a litre to ₹ 3.85 and on branded diesel from ₹ 3.75 to ₹ 5.25 per litre.
The excise duty hike will not be passed on to consumers and will be adjusted against reduction in rates that was likely this weekend, said B Ashok, chairman, Indian Oil Corp. "For the moment, we are not passing on the increase in excise duty. It is being absorbed by companies and will be adjusted against the review in rates, which was due on Saturday."
A revision in rates will be considered at the end of November, he said. "As and when we look at price revision, whenever it is due, we will look at the situation and decide on revising rates."
Normal petrol will continue to cost ₹ 64.25 a litre in Delhi, and normal diesel ₹ 53.35 a litre.
The fall in global oil prices and the resultant reductions in retail prices have hurt state governments, but the Centre has not been impacted as excise duty on the two fuels is fixed, meaning that the same duty is applicable regardless of the prevailing retail price.
Unbranded petrol currently attracts a basic excise duty of ₹ 1.20 per litre, a special additional excise duty of ₹ 6 a litre and a road cess of ₹ 2 per litre.
Unbranded diesel attracts a basis excise duty of ₹ 1.46 a litre and a road cess of ₹ 2 per litre.
The total excise duty on unbranded petrol will rise from ₹ 9.20 to ₹ 10.70 per litre and that on unbranded diesel from ₹ 3.46 to ₹ 4.96 per litre.