The central government on Thursday cut excise duty on petrol and diesel. The Centre slashed excise duty on petrol to ₹3/litre from ₹13. Excise duty on diesel has been cut from ₹10 to zero.
However, there will be no change in the pump prices of petrol or diesel. The move aims to help Oil Marketing Companies (OMCs) reduce under-recoveries amid the ongoing Middle East conflict, which has caused volatility in the oil market due to the near closure of the Strait of Hormuz.
The excise duty cut comes a day after Nayara Energy, the premier private fuel merchant in India, implemented a price hike, increasing petrol price by ₹5 and diesel by ₹3 per litre.
Check the latest city-wise petrol and diesel prices in the metro cities of India.
Nayara Energy increased prices to offset the sharp spike in international oil benchmarks. The Indo-Russian oil refining and marketing company, which manages 6,967 of the 102,075 filling stations nationwide, has decided to pass a portion of these rising procurement costs on to the public.
Nayara raised the base prices of petrol and diesel by ₹5 and ₹3, though the final impact on consumers varies by region. This difference arises from differences in state levies, such as VAT. In specific areas, petrol prices reached as high as ₹5.30 per litre due to a hike by Rosneft-backed Nayara.
Meanwhile, Jio-bp — the retail partnership between Reliance Industries and BP Plc overseeing 2,185 locations — has maintained its current pricing structure. Due to a surge in global oil prices, it continues to sustain substantial losses on every litre of fuel sold.
State-controlled retailers dominate nearly 90% of the domestic market, keeping prices frozen despite escalating deficits.
Overall, petrol and diesel retail prices have largely remained unchanged since April 2022. During crude peaks of this period, state-run giants Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) absorbed but recovered margins when prices softened.
These state-run giants last week increased bulk diesel rates for industrial clients by roughly ₹22 per litre and the price of premium-grade petrol by ₹2, PTI reported.
Rupee hits record low against US dollar
Amid rising US Treasury yields and Brent crude holding past $100 a barrel, the Indian rupee has lost 3.5% since the West Asia conflict began on 28 February. The currency hit a record low past the 94-per-dollar mark on Friday, falling to 94.1575 per dollar.
