Excise duty on petrol, diesel hiked Rs. 3 per liter
The government on Friday announced an increase in excise duty on petrol and diesel by Rs. 3 per liter, the steepest hike in eight years. However, the hike in excise duty will not impact retail fuel prices. The move is aimed at increasing the government's profits as the prices of petrol and diesel have decreased due to reduced crude oil rates.
Special excise duty raised Rs. 2; road cess hiked Re.1
The government raised special excise duty on petrol and diesel by Rs. 2 per liter. The special excise duty for petrol now stands at Rs. 8 per liter and Rs. 4 per liter for diesel. The government also increased road and infrastructure cess—collected as additional excise duty—by Re. 1 per liter, raising it to Rs. 10. The change came into effect Saturday morning.
Excise duty on petrol Rs. 22.98; Rs. 18.83 for diesel
The excise duty on petrol and diesel now stands at Rs. 22.98 and Rs. 18.83 per liter respectively. When Prime Minister Narendra Modi took office in 2014, the tax on petrol and diesel was Rs. 9.48 and Rs. 3.56 per liter respectively.
Hiked excise duty would increase government's annual revenue Rs. 39,000cr
Government officials told PTI the excise duty was hiked to collect additional revenue amid falling fuel prices. While the retail prices of petrol and diesel would remain unchanged, the excise duty hike would increase the government's revenue by about Rs. 39,000 crore annually. In the three weeks remaining in the current fiscal, the estimated additional revenue would be less than Rs. 2,000 crore.
Petrol, diesel prices continue to get cheaper amid reduced demand
Separately, petrol and diesel prices were reduced by 13 paise and 16 paise respectively. In Delhi, petrol now retails at Rs. 69.87 per liter while diesel retails at Rs. 62.58 per liter. Petrol and diesel prices—which are revised daily—have been falling due to a slump in crude oil prices. Crude oil prices have fallen amid growing reluctance towards traveling due to the coronavirus outbreak.
Saudi Arabia also slashed oil prices
The Organization of the Petroleum Exporting Countries (OPEC) had suggested cutting oil production to keep prices from falling. However, after Russia refused to participate with the OPEC deal, top oil exporter Saudi Arabia slashed prices and indicated that it will increase production.
Centre had earlier hiked excise duty between 2014-16
Between November 2014 and January 2016, the government had raised excise duty on petrol and diesel nine times amid falling oil prices across the globe. Overall, petrol and diesel rates were raised by Rs. 11.77 and Rs. 13.47 per liter respectively between the period. The government's excise more than doubled to Rs. 2,42,000 crore in 2016-17 from Rs. 99,000 crore in 2014-15.