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Under Prime Minister Narendra Modi’s leadership, the government raised excise duties whenever international oil prices fell during its 11-year tenure. From November 2014 to January 2016, excise duties on petrol and diesel were increased nine times to capitalize on declining global oil prices, resulting in a rise of Rs 11.77 per litre for petrol and Rs 13.47 per litre for diesel. This approach more than doubled the government’s excise revenue, reaching Rs 2,42,000 crore in 2016-17, up from Rs 99,000 crore in 2014-15.
On Monday, the government announced an increase in the excise duty on petrol and diesel by Rs 2 per litre for each fuel type. Nonetheless, retail prices will not change, as this increase will be countered by a decrease prompted by falling international oil prices.
An official directive stated that the excise duty on petrol has now reached Rs 13 per litre, while diesel is set at Rs 10 per litre.
This decision is influenced by the ongoing fluctuations in global oil prices and the tariffs levied by Trump, which are anticipated to boost revenue for the Union government.
While the recent announcement did not specify how or when this will affect retail prices, the Oil Ministry has assured that Indian consumers will not be impacted. On the same day, Brent crude futures declined by USD 2.43, or 3.7%, to USD 63.15 per barrel, while US West Texas Intermediate crude futures fell by USD 2.42, or 3.9%, to USD 59.57.
India imports 85% of its oil needs.
The Oil Ministry posted on X that “PSU Oil Marketing Companies have confirmed that there will be no retail price increase for #Petrol and #Diesel after the excise duty hike implemented today.” Starting Tuesday, Ujjwala households in Delhi will incur new expenses.
The last time fuel prices were reduced was on March 14, just before the Lok Sabha elections, following a period of price freezes that began on May 22, 2022.
On the Bombay Stock Exchange, shares of key oil marketing companies (OMCs) saw declines, with Reliance Industries closing at Rs 1170.95 (down 2.80%), Indian Oil at Rs 128 (down 1.65%), Hindustan Petroleum at Rs 348.20 (down 2.75%), and Bharat Petroleum at Rs 275.65 (down 1.34%).
Both Brent and WTI crude benchmarks have reached their lowest levels since April 2021, with Brent futures dropping by $2.23, or 3.4%, to $63.35 per barrel, and U.S. West Texas Intermediate crude futures decreasing by $2.22, or 3.58%, to $59.77. Over the last week, Brent and WTI have posted losses of 10.9% and 10.6%, respectively.
(Newsroom staff only edited this story for style from a syndicated feed)
