The Indian government has reduced excise duty on domestic petrol and diesel by ₹10 per litre each to shield consumers from rising international oil prices. Finance Minister Nirmala Sitharaman announced the duty cuts on Friday, citing the West Asia crisis that has disrupted global energy supplies.
The duty cuts will reduce oil companies' losses on auto fuels without any reduction in pump prices of petrol and diesel. The government has also imposed duties on exports of diesel by ₹21.5 per litre and aviation turbine fuel (ATF) by ₹29.5 a litre to ensure vital fuel products are available domestically.
Benchmark crude oil soared about 48.22% to $108.01 a barrel on Thursday, close from $72.87 before the start of the war in West Asia on February 28.
The special excise duty (SAD) on petrol and diesel effectively fell to ₹3 per litre and zero, respectively, after the duty cuts. The impact of the duty cuts, if maintained for an entire financial year, would amount to about ₹1,70,000 crore, an expert said.
