Excise Duty Cut: Petrol price slashed to Rs 3, diesel to 0 — Check city-wise rates in Bengaluru, Delhi, Mumbai, Kolkata, Hyderabad, and more

The Centre has reduced excise duties on petrol and diesel. The duty on petrol has been cut from Rs 13 to Rs 3 per litre, while diesel now attracts zero excise duty, down from Rs 10 earlier. 

The benefit of this reduction may be passed on to consumers in the coming days. However, there has been no formal announcement yet on a cut in retail fuel prices, and it is also unclear how much this move will cost the government.

What does it mean for commuters?

A cut in excise duty on petrol and diesel means the government collects less tax on every litre sold, which lowers the base price of fuel. For retail customers, this typically results in lower prices at the pump almost immediately, as fuel rates are closely linked to government-imposed taxes.

The impact of such a reduction is also expected to extend to the broader economy. Cheaper fuel can reduce transportation costs, which in turn may help bring down the prices of goods and services.

Rs 2/litre hike on premium petrol 

Hindustan Petroleum Corporation Limited (HPCL) has raised the price of its premium petrol by a little over Rs 2 per litre. Regular petrol prices have not changed. In Delhi, premium petrol now costs Rs 101.89 per litre, up from Rs 99.87, CNBC-TV18 reported citing sources. Prices may differ in other cities due to local taxes and costs.

Indian Oil Corporation (Indian Oil Corporation) has also increased the price of its premium petrol XP-95 by around Rs 2 per litre. However, it has kept regular fuel prices unchanged, even as global fuel costs rise.

The company said this change will not affect most consumers much, since premium fuel makes up only a small part of total demand. It added that the focus is on steady supply and careful pricing during changing global conditions.

This comes a day after Nayara Energy (Nayara Energy) increased petrol prices by Rs 5 per litre and diesel by Rs 3 per litre.

Check city-wise Petrol and Diesel prices

Why are petrol prices hiking?

The price hikes are linked to rising crude oil prices and higher input costs due to tensions in West Asia. The increase mainly affects users of high-octane fuel, which is a small portion of overall petrol use.

The government has not directly increased fuel prices. It said petrol and diesel prices are deregulated and set by oil companies. Officials stressed that regular petrol prices – used by most people – have not gone up.

“There hasn’t been any price increase in normal petrol. There is some increase only in the premium category, and that is hardly 2–4% of the entire petrol sold everyday. There is no petrol price hike for common consumers,” CNBC TV-18 quoted Sujata Sharma, Joint Secretary at the Ministry of Petroleum and Natural Gas, as saying.

India’s crude oil import 

India’s crude oil import costs have risen sharply in recent days. The average price of the Indian crude basket reached $146.09 per barrel on March 17, more than double compared to February, mainly due to supply concerns around the Strait of Hormuz.

A report by Elara Capital (Elara Capital) said that if crude prices stay above $110 per barrel, fuel companies’ margins could shrink significantly. Petrol and diesel margins may fall by over Rs 6 per litre, and losses on LPG could increase further.

Separately, Indian Oil has also raised the price of industrial diesel sharply, from Rs 87.67 to Rs 109.59 per litre, due to rising input costs, according to the CNBC TV-18 report.