Govt hikes excise duty on petrol, diesel by ₹2 per litre

Puri: Consumers to be spared price hike; funds to offset OMCs' under-recoveries

- Arunima Bharadwaj

The government on Monday hiked the excise duties on both petrol and diesel by ₹2/litre, seeking to use the window provided by subdued crude prices to mobilise additional revenues from the auto fuels. The extra receipts from the increase in the specific duties would be used to offset the under-recoveries incurred by the oil marketing companies (OMCs). The losses occurred as the OMCs kept retail prices of fuels unchanged over several months when global oil prices firmed up.

Concurrently, the OMCs raised the retail prices of LPG by ₹50/cylinder on Monday, for both Ujjwala (subsidised) and the non-Ujjwala consumers, a move that will help them cut under-recoveries on the sale of the cooking fuel.

Oil minister Hardeep Singh Puri said that the excise hike will not be passed on to the consumers, and the proceeds would help offset ₹43,000 crore losses incurred by OMCs.

"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," the oil ministry said in a post on X.