Excise duty on fuels cut by Rs10

The government on Friday cut excise duty on petrol and diesel by 10 per litre each and imposed levies on diesel and aviation turbine fuel (ATF) exports, in a dual measure almed at easing the financial strain on state-run oil retailers while keeping domestic fuel supplies from being diverted abroad though consumers will see no reduction in pump prices, with the duty relief instead being used to partially offset the heavy losses oil com panies are absorbing to hold

retail rates steady. The cut in special additional excise duty on petrol from ₹13 a litre to 3 and diesel, from 210 per litre to 0, will lead to an esti mated revenue loss of 1.75 lakh crore.

Finance minister Nirmala Sitharaman announced the reduction in special additional excise duty (SAED) in a post on X. saying the move "will provide protection to consumers from rise in prices." State-run retail-ers IOC, BPCL and HPCL have kept petrol at 294.77 a litre and diesel at 287.67 in Delhi since March 15, 2024.
In addition to the levies on export of diesel and jet fuel, the government said all refiners have been directed to divert 50% of exported petrol and 30% of exported diesel to the domes tic market.
The petroleum ministry's statement put under-recoveries notional revenue losses on every litre sold below cost-at approximately 226 per litre on petrol and 281.90 per litre on diesel at current crude prices.
Benchmark Brent crude closed at $108.01 a barrel on Thursday, up approximately 48% from $72.87 before the con-flict began on February 28, and was trading at $110.40 on Friday afternoon.

Petroleum minister Hardeep Puri said in his X post that crude had risen from around $70 to around $122 a barrel in the past month, and that petrol and diesel prices for consumers had risen 30-50% in Southeast Asian countries, 30% in North America, 20% in Europe and 50% in Africa.

To be sure, the three state run OMCs had accumulated sig nificant profits in the months preceding the conflict, when international crude prices were considerably lower than cur-rent levels even as pump prices remained unchanged since March 2024. The current losses represent, in part, an unwind-ing of those gains.