Taking advantage of the falling international crude prices, the Indian government has hiked the excise duty on petrol and diesel by ₹1.50 per litre to help the exchequer balance its stressed finances.
After the recent reduction in fuel prices, the cost per litre for petrol and diesel came down by ₹2.41 and ₹2.25, respectively on 1 November.
However, with the excise duty going up by ₹1.50 per litre, there are minimal chances of further cut in fuel prices, as there were speculations that the prices will be slashed on Saturday according to the fortnightly review practice followed by state-owned fuel retailers – IndianOil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL), according to a Zee News report.
With the latest changes in prices, the excise duty on unbranded petrol and diesel has been increased to ₹2.70 and ₹2.96 respectively, while in the case of branded petrol the excise duty has risen from ₹2.35 to ₹3.85. Diesel saw a hike of ₹5.25 from ₹3.75.
The hike has been declared following last week's meeting held by finance minister Arun Jaitley. The ministry took the decision to hike excise duty in the wake of its concerns over the possible shortfall in indirect tax collections. They are aiming at not only benefiting consumers from reducing international fuel prices, but also the exchequer which is struggling with the finances.
Apart from revenue collections, their decision is said to be far-sighted as the ministry is keeping itself ready for a possible rise in international crude prices in the near future. "The thinking is that if all the benefits of softer crude prices are passed on to consumers now, revising prices upwards will cause a lot of angst once international oil prices start rising," The Economic Times stated.
Ever since the international crude oil prices started declining, Indian government reduced the fuel prices after every fortnight, bringing relief to the consumers. But with their latest move, they have ensured both the consumers and the exchequer benefit from the falling prices.
