Govt says reduction in excise duty to lower under-recoveries of PSU oil cos
This story was originally published at 15:45 IST on 27 March 2026
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--Govt: Retail pump prices of petrol and diesel will not change
--Govt: Petrol under-recoveries seen at INR 26/ltr, diesel at INR 81.90/ltr
--Govt: Oil cos absorbing INR 24 bln of petrol, diesel under-recovery daily
MUMBAI – The Centre's decision to lower excise duty by INR 10 per litre on both petrol and diesel will reduce the under-recoveries being absorbed by public sector oil marketing companies – Indian oil Corp. Ltd., Bharat Petroleum Corp. Ltd., and Hindustan Petroleum Corp. Ltd. – which have supplied fuel to consumers at prices well below their cost of supply, the Ministry of Petroleum and Natural Gas said in a release Friday.
The reduction in excise duty comes as a response to the rapid rise in international crude oil prices, which have surged around 75% in less than four weeks to around $122 per barrel due to the ongoing military conflict in West Asia and the resulting loss of supply from the region. At the current crude oil prices, the under-recoveries on petrol are seen around INR 26 per litre and INR 81.90 per litre on diesel, it said. The combined daily under-recovery being absorbed by these OMCs is around INR 24 billion. "The excise reduction offsets Rs 10 (INR 10) per litre of these losses, ensuring OMCs can continue to supply fuel without disruption while keeping retail prices unchanged."
The excise duty reduction is not being passed on as a price cut at retail pumps, it said. The excise duty on petrol has been cut to INR 3 per litre from INR 13 per litre, and the duty on diesel has been lowered to zero from INR 10 per litre. The government has also levied an export duty of INR 21.50 per litre on diesel and INR 29.50 per litre on aviation turbine fuel. End
US$1 = INR 94.81
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Ashutosh Pati
Edited by Avishek Dutta
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