Centre Raises Excise Duty On Petrol & Diesel By Rs 10 & Rs 13 per litre Respectively

New Delhi: The government has taken the opportunity provided by unusually low global oil prices to raise excise duty on petrol and diesel by a historically high margin to raise revenue that has been severely impacted by the Covid-19 related lockdown.

It raised excise duties on petrol by Rs 10 per litre and diesel by 13 per litre – that has the potential to raise the retail price of the two petroleum products between Rs 10-15 per litre depending on the taxation structure in different states.

The government has raised the additional excise duty in the form of road cess on petrol and diesel by Rs 8 per litre.

It has also raised special additional excise duty on petrol by Rs 2 per litre and diesel by Rs 5 per litre. The centre would, however, get a tax bonanza and gain in excess of Rs 1,75,000 crore for full year.

As per a notification issued by Central Board of Indirect Taxes and Customs, the new rates are effective from May 6.

Government sources said that revenue generated from these duties shall be used for infrastructure and other developmental item of expenditure and could handy for any economic package that may be needed to fight the lockdown imposed to check Covid-19 spread

Retail sale prices of petrol and diesel will, however, not change on account of this increase in duties, sources said.

Therefore, it will have no impact on the consumer. Oil companies were building the buffer by not revising petrol and diesel prices for last over 50 days though prices were falling.

The increased excise rates on petrol and diesel is double blow for fuel customers on dates like Delhi where the state government on Tuesday also raised VAT on the two products to 30 per cent raising its retail price by Rs 1.67 per litre in case of petrol and about rs 7.1 per litre in case of diesel.

The government in March had taken Parliamentary approval to raise special additional excise duty on petrol and distal by Rs 8 per litre to Rs 18 per litre from earlier Rs 10 per litre in case of petrol and to Rs 12 per litre from the earlier Rs 4 per litre for diesel. Though duty were not raised then, it was always on cards.


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