The Centre late Tuesday night raised additional excise duty, road and infrastructure cess on petrol by Rs 10 and diesel by Rs 13 as part of revenue augmentation measures for post-COVID economic reconstruction. However, pump prices for the two fuels will not rise.
Such an exorbitant hike in duties would mean no price cut for petrol and diesel consumers in the near future even if crude oil prices have hit rock bottom. But the Centre is expected to garner an estimated Rs 1.5 lakh crore.
Crude oil is selling at $30 per barrel in the international market but Indian consumers are still paying over Rs 70 for a litre of petrol.
Minutes after the gazette notification, the government made it clear that the pump prices of fuels will not change due to the increase in duties.
The consumers were expecting a cut in prices of the transport fuel after çrude oil touched a historic low and India filled it’s strategic reserves to the brim.
While the special additional excise duty on petrol was hiked by Rs 2 a litre, on diesel it was increased by Rs 5 per litre.
The road and infrastructure cess on both the transport fuels were raised by Rs 8 each, a government notification issued late Tuesday night said.
“Retail sale price of petrol and diesel will, however, not change on account of this increase in duties. Therefore, it will have no impact on the consumer,” the ministry said in the note.
The move comes a month after Finance Minister Nirmala Sitharaman got the Finance Bill 2020 amended to raise the limit up to which the government can raise special excise duty on petrol and diesel to Rs 18 per litre and Rs 12, respectively.
Earlier on Tuesday, the Delhi government raised VAT on the two fuels, raising petrol prices to Rs 71.26 a litre and diesel to Rs 69.39 a litre.
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