While there were calls that the centre would not increase excise duty increase on auto fuel including diesel and petrol, there has been effected a special hike of Rs. 2 per litre on both diesel and petrol that comes into effect from March 14.
The increase will enable the government to garner additional revenue at a time when the country is already under an economic slowdown now further to be hit due to coronavirus. The additional mop up is expected to be at around Rs. 2000 crore.
The hike has been due to a steep and continuing decline in crude prices which on Monday this week tumbled by as much 30% and collapsed to levels seen in 1991.
So, whether the hike in excise duty will mean higher price of petrol and diesel shall depend on the decision of OMCs. Thus even if they decide to absorb this hike, you may not see price reduction on auto fuel as has been the case for many days now.