The Centre on Friday announced a Rs 10 per litre cut in central excise duty on petrol and diesel for domestic consumption, even as it imposed fresh export duties on petroleum products in a bid to shield consumers from a sharp spike in global crude oil prices triggered by the ongoing West Asia crisis.
Announcing the decision on social media, Finance Minister Nirmala Sitharaman said the duty reduction is aimed at protecting consumers from rising fuel costs. She added that the government, under Prime Minister Narendra Modi, has consistently sought to insulate citizens from volatility in global supply chains and essential commodity prices.
Alongside the excise cut, the government has imposed an export duty of Rs 21.5 per litre on diesel and Rs 29.5 per litre on aviation turbine fuel (ATF). The move is intended to ensure adequate domestic availability as international prices surge.
Parliament has been notified of the changes.
Petroleum Minister Hardeep Singh Puri said global crude prices have risen sharply over the past month, from about $70 per barrel to $122 per barrel, leading to steep fuel price increases worldwide.
He noted that petrol and diesel prices have increased by 30–50% in Southeast Asia, around 30% in North America, 20% in Europe, and as much as 50% in parts of Africa.
Puri said the government faced a choice between passing on the full impact of rising prices to consumers or absorbing the shock through reduced tax revenues. “The government has chosen to bear the burden on its finances to protect citizens,” he said, adding that oil marketing companies are currently incurring significant losses, estimated at about Rs 24 per litre on petrol and Rs 30 per litre on diesel.
He further said the export duty would discourage excessive overseas sales by refiners at a time of elevated global prices, thereby ensuring sufficient supplies in the domestic market.
According to estimates shared by Emkay Global Financial Services, the excise duty cut would absorb roughly 30–40% of the annualised losses of oil marketing companies (OMCs) on auto fuels at current prices. The fiscal impact on the government is pegged at around Rs 1.55 lakh crore annually due to this burden sharing.
The measures come as geopolitical tensions in West Asia continue to disrupt energy markets, raising concerns over inflation and supply stability in fuel-importing countries like India.