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New Delhi, March 15 (PTI): Petrol price was on Sunday cut by 12 paise a litre and diesel rates by 14 paise as oil companies moderated rate reduction amid the fall in global prices to absorb the hike in excise duty on fuel by the government.
Petrol in Delhi now costs INR 69.75 per litre, while diesel is priced at INR 62.44, according to a price notification of state-owned oil firms.
Delhi has the lowest fuel prices among metros because of lower state taxes.
Industry sources said the reduction in rates would have been higher but for the INR 3 per litre increase in excise duty effected on Saturday.
Oil companies, they said, had been moderating reduction warranted in retail prices in anticipation of an excise duty hike.
The gains they thus accumulated were adjusted against the price hike that would have been necessary because of the increase in excise duty. Some moderation in passing on the decline in international prices in the near future to domestic consumers will continue till all of the excise duty impact is recovered, the sources added.
The government had on Saturday hiked excise duty on petrol and diesel by a steep INR 3 per litre each to garner about INR 39,000 crore additional revenue as it repeated its 2014-15 act of not passing on gains arising from the slump in international oil prices.
According to a notification issued by the Central Board of Indirect Taxes & Customs, special excise duty on petrol was hiked by INR 2 to INR 8 per litre and to INR 4 a litre from INR 2 in case of diesel.
Additionally, road cess was raised by INR 1 per litre each on petrol and diesel to INR 10.
With this, the total incidence of excise duty on petrol has risen to INR 22.98 per litre and that on diesel to INR 18.83.
The tax on petrol was INR 9.48 per litre when the Modi government took office in 2014 and that on diesel was INR 3.56 a litre.
The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
In all, duty on petrol rate was hiked by INR 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop up more than double to INR 2,42,000 crore in 2016-17 from INR 99,000 crore in 2014-15.
It cut excise duty by INR 2 in October 2017 and by INR 1.50 a year later. But it raised excise duty by INR 2 per litre in July 2019.