Government Cuts Excise Duty On Petrol, Diesel By ₹10 Per Litre Amid Global Energy Disruptions

The government has reduced special additional excise duty on petrol and diesel by ₹10 per litre each, bringing petrol duty down from ₹13 to ₹3 per litre and diesel duty from ₹10 to nil, according to Reuters.

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Revised Excise Structure

The excise duty cut applies to both fuels with immediate effect. Petrol now carries ₹3 per litre in a special additional excise duty, while diesel attracts no such duty following the reduction, as per the Reuters report.

The move comes amid a rise in global crude oil prices and supply chain disruptions due to tensions between the U.S., Israel, and Iran.

Global Supply Disruptions

The Strait of Hormuz, which is one of the crude oil supply routes in the world, has been affected by the conflict. According to Reuters, the route supplies daily quantities of 20-25 million barrels of crude oil and 10 billion cubic feet of gas.

For India, about 40-50% of its crude oil supply, amounting to 2.2 to 2.8 million barrels of crude oil daily, is transported through this route.
Pressure On Fuel Retailers

Fuel retailers have been under pressure as domestic petrol and diesel prices remained largely unchanged despite a nearly 50% rise in global crude prices since February 28, when tensions escalated following U.S.-Israel strikes on Iran, according to Reuters.

Nayara Energy increased petrol prices by ₹5 per litre and diesel by ₹3 per litre at its outlets, as per PTI. The company operates 6,967 petrol pumps out of India’s total 102,075 outlets and partially passed on higher input costs to consumers.

India’s Crude Supply Position

The Ministry of Petroleum and Natural Gas stated that India has secured sufficient crude supplies for the next 60 days, according to an official statement.

The ministry said the country is sourcing crude from over 41 suppliers globally, with higher imports from western regions offsetting disruptions linked to the Strait of Hormuz.

It added that all refineries are operating at over 100% utilisation and that oil companies have already tied up supplies for the coming two months, ensuring no supply gap.

The excise duty reduction is expected to ease retail fuel prices while supply arrangements remain in place despite global disruptions.