Petrol-Diesel Prices: Amidst rising global oil prices, the Government of India has provided significant relief to the general public by implementing a substantial reduction in the excise duty levied on petrol and diesel.

Petrol-Diesel Prices: Amidst the fluctuations in petrol and diesel prices, the government has offered major relief to the common man. Today, March 27, the Government of India announced a substantial cut in the excise duty applicable to petrol and diesel. The government has reduced the additional excise duty on petrol from the previous rate of ₹13 per liter to ₹3 per liter.

Meanwhile, the duty of ₹10 previously levied on diesel has been completely removed. This measure was taken amidst mounting pressure caused by international crude oil prices breaching the $100-per-barrel mark and ongoing tensions in the Middle East.

Despite the reduction in the cess, no immediate change in petrol and diesel prices is currently visible across various states of the country today. The government implemented this reduction specifically to ensure that oil companies do not impose an additional burden on the public by raising prices. In the meantime, the Central Government has appealed to all states to reduce their respective VAT rates so that the public can directly benefit from the ₹10 reduction in excise duty.

Anticipated Petrol and Diesel Rates in Major Cities and States Across the Country

Here are the possible reasons why prices remain stable today, despite the reduction in the cess:

International crude oil prices have already crossed the $100-per-barrel threshold. The cost of crude oil has surged due to ongoing tensions in the Middle East and reduced supply from OPEC nations.
Indian oil marketing companies—such as IOC, BPCL, and HPCL—had refrained from raising fuel prices for a considerable period, despite the rise in international oil rates. Consequently, they were incurring financial losses. The government has reduced taxes to help offset these losses, thereby ensuring that the companies do not have to raise prices for the public. While state-run companies have kept prices stable, private firms like Nayara Energy have hiked petrol prices by ₹5.30 and diesel prices by ₹3 in an effort to secure their profits.

How much relief will the reduction in cess provide?

If companies decide to pass on the full benefit of the Central Government's ₹10 per liter tax cut to consumers, the prices of petrol and diesel could drop by ₹10 to ₹12. However, state governments levy VAT on the final retail price of petrol and diesel. If the base price is reduced by ₹10, the applicable VAT on it will also decrease. This is estimated to provide relief amounting to ₹10 to ₹12.