Centre cuts excise duty on petrol, diesel; prices remain unchanged for consumers
The Union government reduced the special additional excise duty on petrol and diesel by ₹10 a litre each, bringing diesel duty to zero and petrol to ₹3 a litre. However, this cut will not lower fuel prices for consumers. Instead, it aims to ease the fiscal hit on oil marketing companies (OMCs) due to high and rising oil prices. The move is expected to cost the exchequer ₹7,000 crore over 15 days. The government also hiked export duties on diesel to ₹1.5 a litre and ATF to ₹9.5 a litre, expecting to add ₹1,500 crore to the exchequer, mitigating some impact. OMCs face significant under-recoveries daily.
Key Points
- The Union government reduced the special additional excise duty on petrol and diesel by ₹10 per litre.
- This duty cut will not result in lower fuel prices for consumers but is intended to reduce losses for Oil Marketing Companies (OMCs).
- The duty on diesel is now zero, and on petrol, it is ₹3 per litre after the reduction.
- The government also increased export duties on diesel and Aviation Turbine Fuel (ATF) to partially offset the revenue loss.
- OMCs are reportedly absorbing under-recoveries of about ₹2,400 crore daily due to high international crude prices.
Exam Facts
- Excise duty cut: ₹10 per litre on both petrol and diesel.
- New duty on diesel: ₹0 per litre; New duty on petrol: ₹3 per litre.
- Estimated cost to exchequer: ₹7,000 crore over 15 days.
- Export duty hike: Diesel to ₹1.5/litre, ATF to ₹9.5/litre.
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