On Monday, the Indian government announced a ₹2 per litre increase in the excise duty on petrol and diesel, effective from April 8. However, officials reassured the public that this adjustment would not reflect in consumer prices. In a statement shared on social media, the oil ministry confirmed that Public Sector Undertaking (PSU) Oil Marketing Companies would not raise retail prices for petrol and diesel despite the duty hike.
Assurance from Government Officials
Union Oil Minister Hardeep Singh Puri addressed the media, clarifying that the recent notification from the Ministry of Finance regarding the excise rate increase would not burden consumers. "Let me make this clear: the increase in excise duty will not be passed on to the consumer," Puri stated during the press conference. This announcement comes as part of the government’s commitment to managing fuel prices effectively.
Fuel Prices: A Global Perspective
During his address, Minister Puri highlighted that fuel prices in India have remained relatively lower than in other countries for the past three years. He attributed this stability to the government’s adept handling of global oil market challenges. Supporting his assertion, Minister of State Suresh Gopi emphasized in a written response to the Rajya Sabha that India stands out as the only major economy that has successfully reduced petrol and diesel prices in recent years.
Price Changes: India vs. Other Countries
Here’s a comparative look at petrol and diesel price changes from November 2021 to December 2024:
- India (Delhi):
- Petrol: -13.60%
- Diesel: -10.92%
- Pakistan:
- Petrol: +27.90%
- Diesel: +33.37%
- Bangladesh:
- Petrol: +12.62%
- Diesel: +29.31%
- Sri Lanka:
- Petrol: +54.29%
- Diesel: +98.59%
- Nepal:
- Petrol: +20.06%
- Diesel: +31.64%
- France:
- Petrol: +11.07%
- Diesel: +10.99%
- UK:
- Petrol: +0.17%
- Diesel: +2.22%
- Canada:
- Petrol: +5.55%
- Diesel: +15.06%
- US:
- Petrol: +1.36%
- Diesel: +6.90%
Understanding Fuel Taxation in India
Consumers often wonder what factors contribute to the final price of petrol and diesel. Prices can vary significantly from state to state, influenced by several elements such as freight charges, base price, and applicable taxes.
Types of Taxes on Fuel
-
Excise Duty:
- This is a central government tax imposed on petrol and diesel companies, currently set at ₹13 for petrol and ₹10 for diesel.
- Value Added Tax (VAT):
- This tax is levied by state governments and varies based on location. Notably, fuel prices in India do not fall under the Goods and Services Tax (GST) framework.
As the government navigates these changes, consumers can feel reassured about the price stability of essential fuels. The focus remains on maintaining affordable pricing while managing international market fluctuations.
