NEW DELHI, Mar 27: The government has reduced the excise duty on petrol to ₹3 per litre and fully exempted diesel from the levy to support oil marketing companies such as HPCL, BPCL, and IOC amid surging global crude prices triggered by the ongoing conflict in the Middle East.
According to a Finance Ministry notification dated March 26, the excise duty on petrol has been lowered from ₹13 per litre to ₹3, while the duty on diesel has been cut to zero from ₹10 per litre. These changes are effective immediately.
Fuel retailers in India have been under pressure as domestic petrol and diesel prices remained frozen despite a nearly 50% jump in international crude rates since February 28, following US and Israeli military strikes on Iran and retaliatory actions by Tehran.
Rating agency ICRA noted that if average crude prices reach USD 100–105 per barrel, fuel retailers could face losses of ₹11 per litre on petrol and ₹14 per litre on diesel. International crude briefly touched USD 119 per barrel earlier this month before easing back to around USD 100 per barrel.
In Delhi, a litre of regular petrol continues to sell at ₹94.77, while diesel is priced at ₹87.67 per litre. India imports 88% of its crude oil and about half of its natural gas, largely via the Strait of Hormuz. Recent disruptions, including Iran blocking the strait and insurers withdrawing coverage, have further complicated imports.
Private players like Nayara Energy, which operates 6,967 of India’s 102,075 petrol pumps, have increased retail prices, with petrol now at ₹100.71 per litre and diesel at ₹91.31 per litre. Conversely, Jio-bp, a joint venture of Reliance Industries and BP Plc, has not raised prices despite significant losses, and state-owned fuel retailers, controlling roughly 90% of the market, continue to keep rates unchanged.