The Department of Revenue has announced a significant reduction in special additional excise duty on petroleum products, marking a shift in the government’s fiscal stance on fuel pricing.
The special additional excise duty on petrol has been slashed to ₹3 per litre from ₹13 per litre, while the duty on diesel has been eliminated entirely, falling from ₹10 per litre to nil. This move is expected to provide substantial relief to oil marketing companies (OMCs) including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum.
The reduction in excise duties represents a notable easing of the tax burden on fuel suppliers, which has remained elevated following consecutive duty hikes implemented over the past years. For OMCs, this adjustment could help improve margins that have been squeezed by volatile global crude oil prices and domestic pricing dynamics.
The excise duty on petroleum products serves as a critical revenue source for the government and has been utilized as a policy tool to manage inflation and support fiscal objectives. This latest cut suggests a recalibration of priorities toward supporting domestic energy sector players and potentially stabilizing retail fuel prices.
While the immediate impact on consumers remains to be seen, the measure underscores the government’s intent to ease pressures on oil companies as global energy markets remain volatile and domestic economic activity continues recovering.
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