Fuel excise duty reduced to shield consumers, FM Sitharaman appreciates decision

Union Finance Minister Nirmala Sitharaman has endorsed the government’s decision to reduce excise duty on petrol and diesel, calling it a necessary step to limit the impact of rising global crude oil prices on Indian consumers.

Finance Minister Sitharaman emphasised that the decision was driven by the need to protect households from international price volatility caused by the ongoing West Asia conflict. She highlighted the government’s approach of intervening quickly during global disruptions to prevent fuel price shocks.

Duty and tax revision

As part of the announcement, excise duty on petrol has been cut to ₹3 per litre from the earlier ₹13, while diesel now carries no excise duty as opposed to the earlier tax of ₹10. The government has also imposed a windfall tax of ₹21.5 per litre on diesel exports.

These measures come as global oil markets react to supply disruptions linked to tensions around Iran and restrictions on the Strait of Hormuz, a key route for crude shipments to India.

Focus on supply continuity

The Finance Minister underlined that ensuring an uninterrupted fuel supply was a key objective behind the move. Rising import costs could have strained oil marketing companies, potentially affecting procurement and availability.

"Prices are increasing abroad, because of which oil marketing companies might stop buying such a situation should not occur. They should continue to buy, bring it in, and make arrangements to ensure our public gets the right quantity at the right time. That's why, due to this decision today, there will be no shortage in supply, no shortage in availability, and the public will get diesel, petrol, and crude," the FM said.

Aviation fuel exports face higher duty

In a parallel step, the government has increased excise duty on Aviation Turbine Fuel (ATF) exports to prioritise domestic supply. This is expected to ensure adequate availability for airlines operating within India.

"ATF is very important. It is necessary for India's aircraft and our companies to get ATF. For that reason, there are many refineries in India that buy goods from abroad, refine them here, and also export them abroad and give them to us. But we have now increased the rate on that export, increased the excise duty, so that instead of exporting, they will sell it in India itself, which will ensure plenty of availability in India and people won't feel a shortage," she said.

(With inputs from ANI)

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