Prateeksha Thakur
(pic source: Freepik)
New Delhi, 8 April 2025
The central government has raised the excise duty on petrol and diesel by ₹2 per litre, effective from April 8, 2025. However, consumers will not see any increase in fuel prices at the pump. Public sector oil marketing companies have decided to absorb the additional cost, ensuring that the retail prices of petrol and diesel remain unchanged for now.
This decision comes at a time when global crude oil prices have fallen to a four-year low. Brent crude, the international benchmark, dropped by over 12% last week and fell further by 4% on Monday, trading below $64 per barrel. Despite the decline in international oil prices, the government has opted to increase the excise duty, a move that is being viewed as a strategy to boost tax revenues without directly burdening consumers.
Petrol and diesel prices today
As of April 8, 2025, petrol and diesel prices remain unchanged across the country. In Delhi, the price of petrol is ₹94.77 per litre, while diesel is retailing at ₹87.67 per litre. These rates have remained steady even after the government’s excise duty revision.
Petroleum and Natural Gas Minister Hardeep Singh Puri has indicated that there may be room for a future cut in petrol and diesel prices, provided that crude oil prices remain stable in the range of $60 to $65 per barrel. However, he did not offer any timeline or confirmation for a price reduction.
How petrol and diesel prices are determined in India
In India, fuel prices are no longer directly controlled by the government. The pricing of petrol was deregulated in June 2010, and diesel followed in October 2014. Since then, oil marketing companies have had the authority to revise prices on a daily basis.
The retail price of petrol and diesel is influenced by several key components:
- The global price of crude oil
- The exchange rate between the US dollar and the Indian rupee
- Excise duty imposed by the central government and Value Added Tax (VAT) levied by state governments
- Refining, transportation, and distribution costs
Among these, excise duty on petrol and diesel is a major component of the final price paid by consumers. With taxes contributing over 50% of the pump price in many regions, even minor changes in duty can significantly affect oil company margins or consumer bills.
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While the rise in excise duty on petrol and diesel will not immediately impact consumers, the government’s move has sparked debate. Some critics argue that the fall in crude oil prices should have been passed on to the public through a reduction in retail prices rather than being used to increase tax revenue.
NI Bureau
