According to recent reports, the excise duty on petrol and diesel has been raised by the Centre Government by INR 10 per litre and INR 13 per litre respectively. The newly raised prices will be valid in the Indian markets from May 6, 2020.
The excise duty on petrol and diesel has been raised when the crude oil prices are relatively at a lower side of only $23.86 per barrel when compared to its peak price. Though, the recent increase in the excise duty will not affect the retail price of petrol and diesel for the market as according to the officials, the state-owned oil firms will be adjusting the increase in excise duty with the recent plummeting oil prices. The new excise will have no impact on the consumers whatsoever.
Coming to other notification that has been revealed by the Centre Government is that the special additional excise duty on petrol has been hiked by INR 2 per litre and INR 5 per litre for diesel. Considering this, the road cess on both petrol and diesel has now been hiked by INR 8 per litre.
Combining all these, the overall excise duty on petrol now stands at 32.98 per litre and INR 31.83 per litre for the diesel. In comparison, when the BJP government took command back in 2014, the excise duty was INR 9.48 per litre on petrol and INR 3.56 per litre on diesel.
The excise duty has been increased for the second time in the past few days only to mop off the gains that have been witnessed from the decrease in international oil prices. The recent excise duty of INR 10 and INR 13 per litre on petrol and diesel respectively will now lead to additional revenue of INR 1.6 lakh crore. Similarly, the increase in excise duty by INR 3 per litre for both petrol and diesel back in March constituted a revenue of INR 39,000 crores.
According to the central government, the plummeting international oil prices have allowed the government to raise some revenue with an increase in excise duty to get the economy on track once again. It would further allow the government to generate resources for tackling the ongoing coronavirus pandemic.
