Amid reports of panic buying due to the ongoing war between the US, Israel, and Iran, the government had slashed excise duty on petrol and diesel by Rs 10. The excise duty on petrol has been cut to Rs 3 per litre from Rs 13 per litre earlier, while the excise duty on diesel has been cut to 0 from Rs 10 per litre earlier. The development holds significance amid rising worries about the fuel price hike across the country. This comes after Nayara Energy, India’s largest private fuel retailer, raised petrol prices by Rs 5 per litre and diesel by Rs 3 a litre. The governmentย
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What does it mean for you?
Fuel marketing companies in India have been under strain as retail petrol and diesel prices remained frozen despite a nearly 50 per cent surge in international oil prices since February 28, when the United States and Israel launched military strikes against Iran, triggering sweeping retaliation from Tehran.ย
In such situations, oil marketing companies usually pass on part of the increase in input costs to consumers. As Nayara Energy has already done, which operates 6,967 of India’s 102,075 petrol pumps.
Jio-bp, the fuel retailing joint venture of Reliance Industries and BP Plc that owns 2,185 outlets, has, however, not raised prices so far despite incurring heavy losses on the sale of petrol and diesel.ย
However, this cut in excise duty will help oil marketing companies like Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL) and Indian Oil Corporation Ltd. (IOC) to keep the petrol and diesel rates stable for consumers.
OMCs hike price of premium petrol by Rs 2
Retail petrol and diesel prices have been frozen since April 2022, with state-run IOC, BPCL, and HPCL absorbing losses when crude prices are high and making profits when rates are low.
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The three retailers last week hiked the price of premium or higher-grade petrol by Rs 2 per litre and the rate of bulk diesel sold to industrial users by about Rs 22 a litre. However, the price of normal petrol and diesel remains unchanged.
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