NEW DELHI: Taking advantage of a slump in global crude prices to a five-year low and to shore up revenue without stoking inflation, the government on Thursday raised excise duty on petrol and diesel by Rs.2 per litre each. However, there will be no change in retail pump rates.
“In order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000-km of roads, during current and next financial year, the government has decided to increase basic excise duty on petrol and diesel by Rs.2 per litre,” an official statement said on Thursday.
This is the third excise duty hike since November, which will help the government raise additional Rs.6,000 crore in the remaining three months of the current fiscal.
With Rs.1.50 a litre excise duty hike effected on both products from November 12 and Rs.2.25 per litre increase in duty on petrol and Rs.1 on diesel from December 2, the government will mop up about Rs.17,000 crore this fiscal which will help contain fiscal deficit.
Excise duty on normal or unbranded petrol has been hiked from Rs.4.95 per litre to Rs.6.95 a litre and on unbranded diesel from Rs.3.96 to Rs.5.96 a litre.
The total incidence of excise on petrol, after including special excise duty and road cess, will be Rs.14.95 and that on diesel will be Rs.7.96 a litre.
Similarly, excise duty on branded petrol has been raised from Rs.6.10 to Rs.8.10 a litre and on branded diesel from Rs.6.25 to Rs.8.25 per litre.
“These increased rates of basic excise duty will be effective from January 2, 2015 (that is from midnight of 1st and 2nd January, 2015). There will be no change in other excise duty rates applicable to these commodities,” the statement added.