Government Increases Cooking Gas and Excise Duties Amidst Falling International Oil Prices

In a recent move, the government has raised cooking gas prices by Rs 50 per cylinder and increased excise duty on petrol and diesel by Rs 2 per litre. While the retail prices remain unchanged, the hikes are aimed at compensating oil companies' losses amidst fluctuating international oil prices.

The government announced on Monday a hike in cooking gas prices by Rs 50 per cylinder, alongside an increase in excise duty on petrol and diesel by Rs 2 per litre each. Despite these adjustments, retail prices remain unchanged, shielding consumers from immediate impact, according to Oil Minister Hardeep Singh Puri.

The revised rates, applicable from April 8, affect both Ujjawala scheme beneficiaries and general users, with specific price distinctions introduced. The increased duties aim to address financial losses faced by public sector oil companies, which faced substantial under-recoveries due to low retail pricing in recent years. These changes coincide with a 63% rise in the average international LPG pricing benchmark since 2023.

The government indicated that the accrued excise duty funds could potentially compensate for company losses. This fiscal strategy forms part of broader moves to stabilize the oil market, balancing tax increases against reductions warranted by declining global oil costs. Meanwhile, international oil prices remain volatile, contributing to the complex landscape of domestic pricing adjustments.

(With inputs from agencies.)