On a day when international crude oil (Brent) prices fell to its lowest level since August 2021, the government hiked excise duty on petrol and diesel by ₹2 a litre and raised cooking gas price by Rs 50 per cylinder.

Brent crude was down by over 3 per cent to $63.23 a barrel on Monday afternoon.

There was no indication of a cut in retail prices of petrol and diesel although the Oil Minister Hardeep Singh Puri said there was a possibility of a downward revision if the crude prices continue to remain in the $60-65 per barrel range.

India may slash car import tariffs to 10% as EU seeks better trade deal

With the increase in LPG rates, the price of a 14.2 kg LPG cylinder in Delhi will now be ₹853 per cylinder, while Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries will pay ₹553.

Defending the decision to hike excise duty, the Oil Minister said it will not be passed on to end consumers.

Puri said retail prices of petrol and diesel will not be cut currently as the OMCs have crude oil stocks (inventory) of 45 days with an average price of $75-80 per barrel.

Reducing retail prices now will lead to inventory losses

“My expectation is that petrol (crude oil) prices, even if they increase beyond $60 a barrel because this is an internationally evolving situation, they are unlikely to go back to $75. If they are in the vicinity of $60 or $65, I think the OMCs will have the headroom in order to look at the price moderation in the downward category (price cut),” he added.

This stance, said former Minister and Congress MP Manish Tewari, reveals a “scandalous” trait to reap profits as opposed to passing on the benefits to the people.

“This defies all rationale.

Crude is hovering at its lowest in several years and the government has slapped excise duty and increased the price of LPG. They do not want to pass on the benefits of low oil prices internationally to the consumers but fill their own coffers.

What has happened to dynamic pricing?” asked Tewari.

Sources said that the excise duty raise compensates for loss of income on union excise in FY25.

The collection of union excise duty in FY25, budget estimate (BE), was expected at ₹1.22 lakh crore, which as per the revised estimate (RE) for FY25 is ₹1.15 lakh crore.

With the latest excise duty raise, the Oil Ministry expects to mop up around ₹32,000 crore as OMCs sell around 16,000 crore litres of petrol and diesel annually.

The LPG price hike is likely to fetch ₹5,000-7,000 crore.

Published on April 7, 2025