On Tuesday, May 5, the central government of India took another step in helping the dropping economy. It raised the excise duty on petrol by Rs. 10 per litre and on diesel by Rs. 13 per litre. This will kick into effect from May 6.
This decision comes at a time when crude oil prices are striving in the global market due to excessive supply and relatively lower demand. The crude oil prices are still at $23.86 a barrel. However, the government officials also said that the duty increase will not affect the fuel prices for retail customers. It will be absorbed by OMCs.
The hike in the prices has taken away the benefits that the consumers may have incurred due to the falling global crude oil prices.
An official said in a statement, “The revenue generated from these duties shall be used for infrastructure and other developmental items of expenditure. Retail sale prices of petrol and diesel, will, however, not change on account of this increase in duties, so it still has no impact on the consumer.”
In the Rs. 10 per litre increase in the excise duty on petrol, Rs. 8 will be charged as road and infrastructure cess and Rs. 2 on account for special and additional excise duty.
The Delhi government also hiked the prices by Rs. 1.67 a litre and Rs. 7.10 a litre on petrol and diesel respectively. Now the prices of petrol and diesel stand at Rs. 71.26 and Rs. 69.39 respectively.