Government Adjusts Duty to Balance Falling Oil Prices

The government increases excise duty on petrol and diesel by Rs 2 per litre, effective April 2025, without affecting retail prices. This hike will offset anticipated price cuts due to declining international oil prices. India depends heavily on oil imports, often hiking duties when global prices drop.

Amid falling international oil prices, the government has decided to raise excise duty on petrol and diesel by Rs 2 per litre. This change, to be implemented from April 2025, will not affect retail prices due to its offset against the required price cut.

The official order places excise duty on petrol at Rs 13 per litre and Rs 10 per litre on diesel. Despite the global slump in oil prices, the Modi government has a history of increasing excise duties whenever there are gains from international price drops.

India's oil dependency stands at 85%, with public sector oil marketing companies confirming stable retail prices. The strategy of adjusting excise duty when global prices fall has previously bolstered the government's revenue during economic lows.

(With inputs from agencies.)