In a major development, the Government of India has announced an increase in excise duty on both petrol and diesel by ₹2 per litre. The new rates will come into effect from Tuesday, April 8, 2025, as per an official notification issued by the Finance Ministry.
The increase comes at a time when global crude oil prices have fallen sharply due to rising fears of a recession and ongoing global trade tensions. Brent crude is currently trading at $63 per barrel in the international market, down significantly from recent highs.
Despite the global correction in oil prices, the excise hike is likely to make fuel costlier for Indian consumers.
Petrol: ₹19.90 per litre (earlier ₹17.90)
Diesel: ₹15.80 per litre (earlier ₹13.80)
This increase directly impacts the Retail Selling Price (RSP) of fuel, as excise duty is a central government tax component that forms a significant part of the final price.
Let’s break down the current fuel pricing in Delhi based on Indian Oil Corporation Limited (IOCL) data:
Base Price: ₹55.46
Freight Charges: ₹0.20
Excise Duty: ₹19.90
Dealer Commission: ₹3.77
VAT (Value Added Tax): ₹15.39
Base Price: ₹56.20
Freight Charges: ₹0.22
Excise Duty: ₹15.80
Dealer Commission: ₹2.58
VAT: ₹12.82
With the revised excise duty, petrol and diesel prices are likely to increase further by ₹2 per litre across all states, subject to VAT implications.
In related news, the government has scrapped the windfall profit tax on domestically produced crude oil and exports of petroleum products, including jet fuel (ATF), petrol, and diesel.
The windfall tax was originally introduced on July 1, 2022, to tap excess profits earned by oil producers amid high global prices. The removal aligns with falling crude prices in the global market and aims to support domestic oil producers and exporters.
Fuel prices in India are influenced by multiple factors:
International crude oil prices
INR-USD exchange rate
Refining costs
Freight and logistics
Central and state taxes (Excise & VAT)
Oil Marketing Companies (OMCs) like IOCL, BPCL, and HPCL update fuel prices daily based on these dynamic factors.
While the fall in global oil prices might suggest relief for consumers, the recent excise duty hike could offset any benefit. With prices already nearing ₹95/litre for petrol in major cities, the new tax rates are expected to impact household budgets, transportation costs, and inflation.
Stay tuned for daily fuel price updates and tax-related developments here.
