The Indian central government has announced an increase in excise duty on both petrol and diesel by Rs 2 per litre each, effective April 8, 2025. This decision, detailed in an official order, raises the excise duty on petrol to Rs 13 per litre and on diesel to Rs 10 per litre.
The move comes at a time when global crude oil prices are trending downwards, primarily due to concerns about a potential global trade war triggered by reciprocal tariffs imposed by the US administration. This juxtaposition of falling international oil prices and rising domestic excise duty has raised concerns among consumers.
The government’s decision is likely intended to offset the potential decrease in petrol and diesel prices that would have otherwise resulted from the decline in international oil prices. While the government may be aiming to bolster its revenues, the timing of the excise duty hike has drawn criticism, particularly given the existing inflationary pressures on consumers.
The increase in fuel prices is expected to further strain household budgets and potentially drive up transportation costs and the prices of essential commodities. This situation is compounded by the economic uncertainty surrounding the US administration’s tariffs and their potential impact on global trade.
According to the latest notification from the Finance Ministry, the revised excise duty rates will take effect on April 8, 2025.