In order to mop up gains arising from fall in international oil prices, the government increased the excise duty on petrol and diesel by Rs 3 per litre on Saturday.
Govt raises fuel excise duty on petrol
According to an official notification, the special excise duty on petrol was hiked by Rs 2 to Rs 8 per litre in case of petrol and to Rs 4 in case of diesel.
Apart from this, the road cess on petrol was also raised by Rs 1 per litre each on petrol and diesel to Rs 10.
The increase in excise duty would normally lead to a hike in oil prices. However, most of it would be adjusted against the fall in rates that would have necessitated because of the slump in international oil prices.
The current round of hike comes in the wake of global crude prices declining by more than 50 per cent since December 2019 from $65.5 per barrel to $32.32 per barrel on March 12. This was on the back of a deepening slowdown in the world economy as the outbreak of novel coronavirus has spread across the globe and a price war between major oil-producing countries like Saudi Arabia, Iran and Russia.
Meanwhile, the revised prices for petrol per litre in metros are as follows: Delhi (Rs 69.87), Kolkata (Rs 72.57), Mumbai (Rs 75.57) — all down by Rs 0.13 — and Chennai (Rs 72.57), down Rs 0.14.
The revised prices for diesel per litre in metros are as follows: Delhi (Rs 62.58), Kolkata (Rs 64.91) — a decline by Rs 0.16, Mumbai (Rs 65.51) — and Chennai (Rs 66.02), down Rs 0.17.
The excise duty hike is expected to help the government collect nearly Rs 2,000 crore, according to the sources. The government is likely to bring the revised duties to parliament on March 16.
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