Govt Cuts Excise To ₹11.90 & Diesel To ₹7.80 Per Litre, Here’s How Much Tax You Pay on Petrol Despite No Price Change
The government cut excise duty on petrol to Rs 11.90 and diesel to Rs 7.80 per litre, offering relief to oil companies facing losses from rising crude prices. However, retail fuel prices are unlikely to drop as the government is absorbing the benefit to support OMCs and maintain price stability.
The government cut excise duty on petrol to Rs 11.90 and diesel to Rs 7.80 per litre. |
New Delhi: The government has reduced the special additional excise duty on petrol and diesel through a notification dated March 26.
On petrol, the duty has been cut from Rs 13 per litre to Rs 3 per litre. On diesel, it has been reduced from Rs 10 per litre to zero. The move is effective immediately and aims to reduce pressure on oil companies.
Relief for Oil Companies
Oil marketing companies (OMCs) have been facing losses because fuel prices in India remained stable even as global crude prices surged nearly 50 percent since late February.
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International crude oil had touched around USD 119 per barrel earlier before easing to about USD 100. The duty cut will help reduce the losses of these companies.
How Much Tax You Pay on Petrol
Before the cut, the total central excise duty on petrol was Rs 21.90 per litre. This included basic excise duty, special additional duty, and other cesses.
After the revision, the total excise duty has come down to Rs 11.90 per litre, reducing the overall tax burden.
Tax Breakdown on Diesel
For diesel, the total excise duty earlier was Rs 17.80 per litre.
After the latest cut, it has been reduced to Rs 7.80 per litre. This significant reduction is expected to ease cost pressures on fuel suppliers.
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State Taxes Still Apply
Apart from central taxes, state governments also charge VAT, which varies across India.
For example, Delhi charges Rs 15.40 per litre on petrol, while Mumbai levies 25 percent VAT on petrol and 21 percent on diesel. These taxes form a major part of the final fuel price.
Other Costs in Fuel Prices
The final retail price of petrol and diesel also includes dealer commission.
All these components- central excise duty, state VAT, and dealer margin—together decide what consumers pay at fuel stations.
Will Fuel Prices Fall?
Despite the duty cut, petrol and diesel prices are unlikely to fall immediately.
The government has chosen to absorb the benefit to reduce losses of oil companies. Officials say this step helps protect both consumers and companies during a period of high global oil prices.
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