Excise Duty Hiked on Petrol and Diesel by ₹2/Litre, But Retail Prices Stay the Same
In a move that may appear alarming at first glance, the Indian government has increased the excise duty on petrol and diesel by ₹2 per litre. However, there’s no need for panic at the fuel pump—retail prices will remain unchanged.
New Rates, No Price Hike for Consumers
The excise duty hike, effective from April 8, 2025, brings the total tax on petrol to ₹13 per litre and ₹10 per litre on diesel. Despite the increase, the retail prices of petrol (₹94.77) and diesel (₹87.67) in Delhi will stay the same.
This decision comes amid a significant drop in international oil prices, with Brent crude falling to $63.15 per barrel—its lowest since April 2021—due to global recession fears triggered by escalating US-China trade tensions.
A Familiar Fiscal Strategy
This isn’t the first time the Modi government has leveraged falling global oil prices to increase excise duty without impacting consumers. Similar hikes were executed between 2014 and 2020, boosting government revenue substantially.
“PSU Oil Marketing Companies have informed that there will be no increase in retail prices,” the Ministry of Petroleum stated on X.
Balancing Act Between Revenue and Relief
While the hike may seem like a revenue-centric move, it strategically avoids consumer backlash during an election-sensitive period. The last similar hike was offset by a ₹2 cut in prices before the previous general elections.
India, which imports 85% of its crude oil, remains at the mercy of global oil trends. As long as international prices fall, the government appears poised to use the margin to strengthen its fiscal position—without making consumers pay more at the pump.
