.jpeg)
Govt Slashes Fuel Excise Duty by ₹10/Litre to Ease Pressure from West Asia Crisis
Petrol Diesel: Rising international oil prices have put the country's oil marketing companies under tremendous pressure and increasing losses. Now, the government has decided to reduce central excise duty, providing significant relief to oil companies. Let's explore the impact of this decision.
The government has taken a big step due to the fighting in West Asia and the energy crisis. A Finance Ministry notification issued on March 26 announces that the excise duty on petrol and diesel will be reduced by 10 rupees a liter. Now, the excise duty on petrol will range from 13 rupees a liter to 3 rupees a liter, and the excise duty on diesel will range from 10 rupees a liter to 0 rupees a liter.
The reduction is aimed at helping oil marketing companies like HPCL, BPCL, and IOC cope with higher crude oil prices globally due to fighting in West Asia. The ministry stated that this reduction will be effective immediately. International oil prices have risen by about 50 percent due to the ongoing war in West Asia. However, the government has so far kept petrol and diesel prices stable despite this crisis, putting pressure on fuel marketing companies in the country.
Rating agency ICRA said in a note released on Thursday that if the average crude oil price remains at $100-105 per barrel, fuel companies could incur losses of up to ₹11 per liter on petrol and ₹14 per liter on diesel. Earlier this month, international oil prices reached $119 per barrel, but later declined to around $100 per barrel. Currently, the price of petrol in Delhi is stable at ₹94.77 per liter and diesel at ₹87.67 per liter.
Want to get your story featured as above? click here!
Want to get your story featured as above? click here!
India imports approximately 88 percent of its total crude oil needs and nearly half of its natural gas, a large portion of which comes through the Strait of Hormuz. As the conflict escalated, Iran blocked the strait, virtually halting the movement of tankers.
Nayara Energy, which operates 6,967 of the country's 102,075 petrol pumps, has decided to pass on some of the increased costs to consumers. Petrol at its pumps has become ₹100.71 per liter and diesel ₹91.31 per liter. Meanwhile, Reliance Industries and BP's joint fuel retailer, Jio-BP, which has 2,185 outlets, has not yet increased prices despite heavy losses. State-owned oil companies, which control approximately 90 percent of the market, are currently maintaining stable prices.
Excise duty on petrol and diesel is a tax levied by the central government. The primary purpose of this tax is to generate revenue, which is used for national development, infrastructure, defense, and various welfare schemes.
