The government has increased the excise duty on both petrol and diesel by ₹2 per litre, with the new rates coming into effect from 8 April 2025. This decision was taken at a time when global oil prices are fluctuating and new tariffs by the United States have added pressure to the global economy.
Officials have said that this increase is not expected to directly impact retail fuel prices in India.
The Oil Ministry stated that due to recent drops in international crude prices, the burden of higher excise duty may be absorbed, avoiding any immediate rise in prices for consumers. However, this move is expected to help boost the Union government’s revenue collections at a critical time.
In the weeks leading up to this decision, petrol and diesel prices had already been reduced in India. The last cut was made on 14 March, just ahead of the Lok Sabha elections.
That reduction came after a prolonged freeze in prices, which had started on 22 May 2022. During that earlier phase, the government had twice slashed excise duty, lowering it by ₹13 per litre on petrol and ₹16 per litre on diesel.
Despite the assurance that prices at the pump will remain unchanged for now, the market has reacted cautiously. Shares of key oil marketing companies (OMCs) fell sharply on the Bombay Stock Exchange.
Reliance Industries closed 2.80 pc lower at Rs 1170.95, Indian Oil dropped 1.65 pc to Rs 128, Hindustan Petroleum lost 2.75 pc to end at ₹348.20, and Bharat Petroleum fell 1.34 pc to ₹275.65.
Meanwhile, crude oil benchmarks recorded significant declines. Brent futures fell by $2.23 to $63.35 per barrel — the lowest level since April 2021. Similarly, U.S. West Texas Intermediate (WTI) futures dropped by $2.22 to $59.77 per barrel.
Over the past week, Brent and WTI recorded losses of more than 10 pc, indicating continuing weakness in the global oil market.
Amid these developments, Oil Minister Hardeep Singh Puri recently said that if crude oil prices remain low, there could be further reductions in petrol and diesel prices in the future. He appeared hopeful about the possibility of passing on more relief to consumers.
However, the government’s decision to increase excise duty has drawn strong criticism from the opposition. Congress President Mallikarjun Kharge accused the Modi government of ignoring the benefits of lower international oil prices and instead choosing to increase the tax burden on the common people.
He argued that since May 2014, crude oil prices have dropped by over 40 pc, but consumers have not received proportional relief.
Kharge also expressed concern over the significant fall in the stock market, where investors reportedly lost ₹19 lakh crore. He blamed the government’s slow response to the evolving global trade situation, calling it a "Kumbhakarani sleep" — referring to a deep and careless slumber.
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