The government of India has cut the special additional excise duties on petrol and diesel, in a move seemingly to reduce losses of oil companies amid the Middle East conflict. In a government order on Thursday, the finance ministry reduced the special excise duty on petrol to ₹3 per litre from ₹13 earlier. It also cut the duty on diesel to zero from ₹10. Vehicles at a petrol pump in Uttar Pradesh on Thursday. (ANI) Finance minister Nirmala Sitharaman said the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each in view of the West Asia crisis, This will provide protection to consumers from rise in prices, she said, adding that Prime Minister Narendra Modi has always ensured that citizens are protected from vagaries of supply and costs of essential goods. Further, duties have been imposed on exports of Diesel at ₹21.5 per litre and on Aviation Turbine Fuel (ATF) at ₹29.5 per litre, she said. “This will ensure adequate availability of these products for domestic consumption. The Parliament has been notified about the same,” she said on X.
The notification comes amid supply disruptions due to the ongoing US-Iran war. “…the Central Government, being satisfied that it is necessary in the public interest so to do…,” reads a part of the order.
The changes were notified through amendments to central excise rules and duty structures, which “shall come into force with immediate effect,” as per the Gazette notification. There is unlikely to be any immediate impact on pump prices. On aviation turbine fuel (ATF), the order states: “Aviation Turbine Fuel Rs. 50 per Litre” as special additional excise duty, alongside exemptions that cap the effective rate at “Rs. 29.5 per litre” in certain cases. ‘Bold decision’: Govt explains reason behind excise duty cut The excise duty move comes amid the ongoing war in the oil-rich Gulf, sparked by US-Israeli strikes on Iran, which has pushed global crude oil prices above $100 and disrupted key supply routes like the Strait of Hormuz - the currently choked waterway through which a fifth of world's oil and gas requirements travel. Speaking on the excise duty cut, Minister of Petroleum and Natural Gas Hardeep Puri said on X that the Modi government had two choices amid rising crude prices - either increase prices drastically for citizens of Bharat as all other nations have done or bear the brunt on its finances so that Indian citizen is insulated from international volatility.