Petrol prices cut by 12 paise a litre, diesel declines by 14 paise

Topics petrol | diesel | diesel price

Industry sources said the reduction in rates would have been higher but for the Rs 3 per litre increase in excise duty effected on Saturday

Petrol price was on Sunday cut by 12 paise a litre and diesel rates by 14 paise as oil companies moderated rate reduction amid the fall in global prices to absorb the hike in excise duty on fuel by the government.

Petrol in Delhi now costs Rs 69.75 per litre, while diesel is priced at Rs 62.44, according to a price notification of state-owned oil firms.

Delhi has the lowest fuel prices among metros because of lower state taxes.

Industry sources said the reduction in rates would have been higher but for the Rs 3 per litre increase in excise duty effected on Saturday.

Oil companies, they said, had been moderating reduction warranted in retail prices in anticipation of an excise duty hike.

The gains they thus accumulated were adjusted against the price hike that would have been necessary because of the increase in excise duty. Some moderation in passing on the decline in international prices in the near future to domestic consumers will continue till all of the excise duty impact is recovered, the sources added.

The government had on Saturday hiked excise duty on petrol and diesel by a steep Rs 3 per litre each to garner about Rs 39,000 crore additional revenue as it repeated its 2014-15 act of not passing on gains arising from the slump in international oil prices.

According to a notification issued by the Central Board of Indirect Taxes & Customs, special excise duty on petrol was hiked by Rs 2 to Rs 8 per litre and to Rs 4 a litre from Rs 2 in case of diesel.

Additionally, road cess was raised by Re 1 per litre each on petrol and diesel to Rs 10.

With this, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83.

The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel