Centre hikes excise duty on fuel amid falling global crude prices | Fusion - WeRIndia

In a surprise move, the central government increased excise duty on petrol and diesel by ₹2 per litre, effective April 8, 2025.

This decision comes even as international crude oil prices continue to tumble, reaching multi-year lows.

The duty revision was confirmed in a notification issued by the Department of Revenue.

With the revision, excise duty on petrol now stands at ₹13 per litre, while diesel attracts ₹10 per litre.

This increase applies solely to the Special Additional Excise Duty (SAED) component.

Notably, there’s no change in the Basic Excise Duty (BED), and SAED collections do not form part of the states’ revenue share.

Despite this hike, Public Sector Oil Marketing Companies (OMCs) clarified that the retail prices of petrol and diesel will remain unchanged for now.

This decision is likely to prevent public backlash ahead of any political developments or elections.

The government cited public interest as the rationale behind the move, invoking provisions under the Central Excise Act, 1944, and the Finance Act, 2002.

However, this comes at a time when global crude oil prices are falling sharply. Brent crude dropped over 3% to $63.23 per barrel on April 7, hitting the lowest level in over three years.

The steep decline in crude oil prices is driven by growing recession fears, trade tensions, and excess supply from OPEC+ nations.

In fact, Goldman Sachs has revised its forecast for Brent crude to $69 per barrel for the year, down 5.5%.

Many experts and consumers had expected a cut in retail fuel prices given the global scenario.

The last reduction in India was made on March 14, 2025, after a long price freeze that began in May 2022.

Though retail rates remain steady for now, the tax increase effectively means reduced benefits for end users from falling global oil prices.

The move may help boost government revenues, but it also reduces room for a possible consumer relief.

Going forward, any significant change in pump prices could depend on how long crude oil remains subdued and the government’s revenue priorities.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on March 22, 2017

Image Reference: https://pxhere.com/en/photo/1231214