New Delhi, April 7, 2025 — In a move that could have stirred concern among fuel consumers, the Revenue Department of India’s Central Government has announced a ₹2 per litre increase in excise duty on petrol and diesel. However, officials have clarified that this hike will not affect the retail prices for end users.
The Ministry of Petroleum and Natural Gas addressed the public via a post on social media platform X (formerly Twitter), stating, “Public Sector Oil Marketing Companies (OMCs) have confirmed that following the ₹2/litre increase in excise duty, there will be no change in petrol and diesel retail prices.”
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— Hardeep Singh Puri (@HardeepSPuri) April 7, 2025
The announcement comes amid a noticeable drop in global crude oil prices. On Monday, the government raised the excise duty on petrol from ₹11 to ₹13 per litre and on diesel from ₹8 to ₹10 per litre. Despite the higher levies, the ministry reassured that the increase will be absorbed by oil companies, not passed on to consumers.
Government’s Stand: No Burden on Consumers
Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, confirmed the decision while speaking to media representatives. He said, “You must have seen the Finance Ministry’s notification announcing the ₹2 hike in excise duty on petrol and diesel. But this burden will not fall on the consumers.”
Puri elaborated that India’s oil marketing companies typically maintain a 45-day inventory, and the global oil prices have been on a downward trend.
“International crude oil prices have dropped to around $60 per barrel,” Puri noted. “Back in January, crude oil was priced at $83, which later dropped to $75. The average inventory our oil companies hold is based on these previous prices, around $75 per barrel.”
Why Prices Will Remain Unchanged
Experts suggest that the current dip in global oil prices has provided the government a buffer, enabling it to increase tax revenue without spiking consumer prices. Oil marketing companies (OMCs) are expected to absorb the additional cost for now, especially as their margins improve due to the lower procurement cost of crude oil.
This strategy is being seen as a fiscal balancing act — the government collects more in taxes without hurting public sentiment ahead of key political events, including upcoming state elections.
Room for Future Fuel Price Cuts?
When asked if fuel prices might be reduced in the near future, Puri responded optimistically. “In a regulated sector, companies are expected to adjust retail prices in accordance with global market trends,” he said.
This opens up the possibility of future reductions in petrol and diesel prices, should international crude oil rates remain low and economic conditions allow for it.
While the ₹2 hike in excise duty might initially sound like bad news for Indian fuel consumers, the government’s assurance and current market conditions indicate that there will be no immediate increase in pump prices. This move reflects the government’s intent to boost revenue without disrupting household budgets — a strategic decision as India navigates a period of global economic uncertainty.
