New Delhi, March 27: In a significant fiscal move, the Centre on Friday reduced the special additional excise duty on petrol and diesel by ₹10 per litre each. Following the revision, central taxes on petrol have come down to ₹3 per litre, while diesel has effectively been brought to zero.
However, the relief may not immediately reach consumers at the fuel stations. Industry sources indicate that the benefit of the duty cut is likely to be absorbed by Oil Marketing Companies (OMCs), which are currently grappling with substantial under-recoveries on fuel sales.
According to estimates, OMCs are incurring losses of nearly ₹48.8 per litre on petrol and diesel, largely due to the sharp surge in global crude oil prices. Benchmark Brent crude has breached the $100 per barrel mark, recently climbing as high as $122 per barrel amid escalating geopolitical tensions, particularly the US-Israel conflict with Iran and disruptions in the Strait of Hormuz.
Petroleum and Natural Gas Minister Hardeep Singh Puri, in a detailed post on X, highlighted the global nature of the fuel price surge. “International crude prices have gone through the roof in the last month, rising from around $70 per barrel to about $122 per barrel,” he said.
He noted that fuel prices have increased worldwide, with hikes ranging from 20 to 50 percent across regions. “Prices have gone up by around 30–50% in Southeast Asia, 30% in North America, 20% in Europe, and as much as 50% in African countries,” the minister added.
The government’s decision is seen as an attempt to cushion OMCs from mounting losses without directly burdening consumers further. However, analysts say unless global crude prices soften, any meaningful reduction in retail fuel prices remains unlikely in the near term.
