Centre Hikes Excise Duty on Petrol and Diesel by ₹2 Per Litre — But Consumers May Not Pay

The central government has increased excise duty on petrol and diesel by ₹2 per litre starting April 8. But according to the Oil Ministry, retail prices will remain unchanged. Here’s why you won’t feel the pinch.

• WhatsApp
• Facebook
• X
• Instagram
• YouTube

New Delhi, April 7, 2025: In a key fiscal decision, the Central Government has raised the excise duty on both petrol and diesel by ₹2 per litre, according to an official circular issued by the Ministry of Finance. This increase will take effect from April 8, 2025, and is part of the government’s broader strategy amid global oil price volatility.

With this latest revision, the excise duty on petrol now stands at ₹13 per litre, while that on diesel is ₹10 per litre.

Will Consumers Pay More at the Pump?

Despite this hike, the Ministry of Petroleum and Natural Gas has clarified that retail fuel prices will remain unchanged. In a public statement released on Monday, the ministry said:

“PSU Oil Marketing Companies have informed that there will be no increase in retail prices of #Petrol and #Diesel, subsequent to the increase effected in Excise Duty Rates today.”

PSU Oil Marketing Companies have informed that there will be no increase in retail prices of #Petrol and #Diesel, subsequent to the increase effected in Excise Duty Rates today.#MoPNG

— Ministry of Petroleum and Natural Gas #MoPNG (@PetroleumMin) April 7, 2025

This means that while the excise duty component has gone up, oil marketing companies (OMCs) will absorb the cost without passing it on to the end consumer.

Why No Increase in Retail Fuel Prices?

Industry experts, quoted by PTI, noted that the increase in excise duty is being offset against recent drops in international crude oil prices. This adjustment allows OMCs to maintain current fuel prices at the pump, ensuring that consumers don’t feel the burden of the new tax rates.

What This Means for You

• Petrol and diesel retail prices remain unchanged.
• The excise duty hike will help the government shore up additional revenue without impacting the public directly.
• Future changes in global oil markets could still influence fuel prices in India, but for now, there’s no immediate impact on your pocket.

Background

This decision comes at a time when global oil prices have been experiencing fluctuations due to geopolitical tensions and supply chain shifts. The government appears to be leveraging the current low crude oil prices to adjust fiscal balances without fueling inflationary pressures domestically.

While a ₹2/litre hike in excise duty might initially sound concerning, the government’s move to shield consumers by balancing it against falling global oil prices is a relief. Fuel prices at the pump will remain stable, at least for now — offering both the exchequer and the consumer a win-win scenario.