FuelDuty – Centre Cuts Petrol and Diesel Excise Amid Global Price Surge

FuelDuty – The Union government has reduced excise duty on petrol and diesel in response to rising global oil prices, aiming to ease pressure on consumers and businesses.

Union Minister for Road Transport and Highways Nitin Gadkari on Friday welcomed the Centre’s move to lower excise duty on fuel, describing it as a timely intervention focused on public welfare. He said the decision comes at a critical juncture when global energy markets are witnessing sharp volatility due to geopolitical tensions in West Asia.

Government Highlights Citizen-Focused Relief Measure

In a statement shared on social media, Gadkari noted that the ongoing crisis in West Asia has significantly driven up international crude oil prices. He emphasized that the government’s decision reflects a proactive approach to shield citizens from the ripple effects of global economic disruptions.

According to him, while several nations are passing on the burden of rising fuel costs directly to consumers, India has opted to soften the impact through fiscal measures. He credited the leadership of Prime Minister Narendra Modi for prioritizing public interest during uncertain times.

The minister added that the reduction in excise duty is expected to bring relief not only to households but also to industries and transport sectors that are heavily dependent on fuel. He described the move as part of a broader governance strategy aimed at maintaining economic stability during external shocks.

Opposition Questions Timing of Decision

However, the decision has drawn criticism from the opposition. Congress leader Jairam Ramesh raised concerns over the timing and intent behind the move, calling it politically driven. He argued that in previous years, when global crude prices had declined multiple times, the government did not pass on the benefit to consumers.

Ramesh suggested that the latest reduction may be linked to upcoming elections, implying that it is not purely an economic decision. He also hinted that the relief could be temporary, urging people to wait and observe developments after April 30.

Details of the Excise Duty Revision

As per an official notification issued under the Central Excise Act, 1944, the excise duty on petrol has been reduced to Rs 3 per litre, while diesel has effectively been brought to zero. In addition, the government has imposed a windfall tax of Rs 21.5 per litre on diesel exports.

The move is seen as an attempt to balance domestic affordability with revenue considerations, especially at a time when global oil supply chains are under stress.

West Asia Conflict Impacts Global Oil Supply

The backdrop to this decision lies in escalating tensions in West Asia, involving key global players such as the United States, Israel, and Iran. The situation has disrupted crucial maritime routes, particularly the Strait of Hormuz, through which nearly 20 percent of the world’s crude oil supply passes.

India, which relies on this route for approximately 12 to 15 percent of its oil imports, has been directly affected by the supply uncertainties and rising costs. The government’s intervention is therefore also aimed at stabilizing domestic fuel markets.

Fuel Prices Yet to Reflect Changes

Despite the reduction in excise duty, retail prices of petrol and diesel have not seen immediate changes. Industry experts suggest that oil marketing companies may still be absorbing losses incurred due to elevated crude prices, delaying any visible relief at the pump.

Meanwhile, the government has assured citizens that there is no shortage of fuel in the country. The Ministry of Petroleum and Natural Gas stated that all petrol pumps are functioning normally and that sufficient stock is available nationwide.

The ministry also appealed to the public to avoid panic buying, dismissing rumors about supply disruptions as unfounded.