Excise Duty on Petrol, Diesel Hiked by ₹2 Per Litre; Govt Assures No Price Hike for Consumers
In a move aimed at boosting government revenue, the Centre has increased the excise duty on petrol and diesel by ₹2 per litre, according to a notification issued by the Ministry of Finance. The revised rates will be effective from April 8, 2025.
The decision comes at a time when global crude oil prices have been on a downward trend, largely due to concerns over a potential global trade war triggered by the United States’ reciprocal tariffs under former President Donald Trump.
Despite the excise duty hike, the Petroleum and Natural Gas Ministry has assured the public that the retail prices of petrol and diesel will remain unaffected. “PSU Oil Marketing Companies have informed that there will be no increase in retail prices of petrol and diesel, subsequent to the increase effected in Excise Duty Rates today,” the ministry stated.
Analysts believe the move is a revenue-generating measure in the face of global economic uncertainty and domestic fiscal pressures. “Although oil prices are softening globally, the Centre appears to be taking this opportunity to shore up revenue without passing on the impact to consumers—for now,” said Rupa Rege Nitsure, economist and policy expert.
However, the hike has sparked concerns about future pricing trends. If global crude prices were to stabilize or rise, oil marketing companies may be forced to adjust retail prices to accommodate the increased tax burden, potentially affecting transportation and commodity costs.
This marks a shift from the government’s recent stance; in December 2024, it had scrapped the windfall profit tax on domestic crude and fuel exports citing falling international prices.
With inflation still weighing on household budgets, many observers warn that any delayed pass-through of the excise hike to consumers could have ripple effects on the economy. All eyes will be on global oil markets and domestic inflation trends in the coming weeks.
