In view of fears of increase in fuel prices across the country due to the US-Iran war, the Indian government has imposed additional excise duty on both petrol and diesel. (Excise Duty Cut in India) Have made huge cuts. According to the government order, additional excise duty on petrol has been reduced from earlier Rs 13 per liter to Rs 3 per liter. Excise duty on diesel has been reduced from earlier Rs 10 per liter to Rs 0.
This cut has been made amid the global energy crisis caused by the US-Israel war with Iran and the blockade imposed by Tehran on the Strait of Hormuz. The Strait of Hormuz is an important energy supply route for the world. Before the war, about one-fifth of the global seaborne crude oil and gas, i.e. 20 to 25 million barrels of crude oil and about 10 billion cubic feet of gas daily, was sent through this route.
Special additional excise duty applicable on ATF
Apart from this, Modi government has imposed special additional excise duty on Aviation Turbine Fuel for the first time. Under the new rules, tax on ATF was fixed at ₹ 50 per liter, but after the exemption, the effective rate has become ₹ 29.5 per liter. This is likely to increase the cost of airlines, which may impact ticket fares for passengers.
Big relief to domestic oil companies
The government has kept the tax on petrol zero, while the rate on diesel has been fixed at ₹ 18.5 per liter. Many duties on petrol, diesel and ATF have been exempted for export. Apart from this, the windfall tax applicable in 2022 has also been abolished, which will provide relief to domestic oil companies. All these changes have come into effect with immediate effect from 26 March 2026.
Will the prices of petrol and diesel reduce?
After reducing the excise duty on petrol and diesel, now the big question is whether the prices of both will also reduce? For common consumers, this news may not be as much of a relief as it seems. According to sources, there is little possibility of reduction in the prices of petrol and diesel at the pump.
The main reason for this is the huge losses being incurred by the oil companies. At present, the prices of crude oil in the international market have crossed $ 100 per barrel. Due to this, Indian oil companies are incurring a loss of about Rs 48.8 on the sale of every liter of petrol and diesel. Companies will reduce their losses with the relief of Rs 10 given by the government.
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