Centre cuts excise duty on petrol by ₹10 per litre, removes levy on diesel

New Delhi: The Centre has slashed excise duty on petrol to ₹3 per litre and removed it entirely on diesel, aiming to help oil marketing companies such as HPCL, BPCL and IOC cope with rising global crude prices amid the ongoing Middle East conflict.

In a notification dated March 26, the Finance Ministry reduced excise duty on petrol from ₹13 per litre to ₹3, while the levy on diesel was cut to nil from ₹10. The revised rates have come into effect immediately. Fuel retailers in India have been under pressure as petrol and diesel prices at the pump remain unchanged despite a nearly 50 per cent surge in global oil prices since February 28, when the United States and Israel launched strikes on Iran, triggering retaliation from Tehran.

According to rating agency ICRA, if crude oil prices rise to $100–105 per barrel, fuel retailers could incur losses of ₹11 per litre on petrol and ₹14 per litre on diesel. International oil prices had touched $119 per barrel earlier this month before easing to around $100.

In Delhi, petrol continues to retail at ₹94.77 per litre, while diesel is priced at ₹87.67. India imports about 88 per cent of its crude oil requirements and nearly half of its natural gas, much of which passes through the Strait of Hormuz. With the conflict intensifying, Iran has blocked the route, and insurers have withdrawn coverage, disrupting tanker movements.

Private retailer Nayara Energy, which operates 6,967 of India’s 1,02,075 petrol pumps, has increased prices, with petrol now costing ₹100.71 per litre and diesel ₹91.31. However, Jio-bp, the fuel retail joint venture of Reliance Industries and BP, which operates 2,185 outlets, has not raised prices so far despite incurring losses.

State-run fuel retailers, which control about 90 per cent of the market, continue to keep prices unchanged.