Petrol, Diesel Price Hike Alert: Excise Duty Increased By Rs 2 Per Litre; How Your Pockets Will Be Hit?

Fuel Prices: In a major development, the Indian government has increased the excise duty on petrol and diesel by Rs 2 per litre, which is likely to hit your pockets! Because excise duty is one of the components in formulating fuel prices that end consumers pay for the purchase of petrol and diesel. A hike in excise duty eventually leads to a surge in fuel prices!

The announcement comes at a time when crude oil prices have crashed significantly due to trade war tensions.

As per Trading Economics, Brent crude oil futures dropped more than 3% to $63.5 per barrel on Monday, hovering at its lowest level since April 2021, amid mounting concerns that the escalating trade war could slow the global economy and weaken energy demand. Last week, Brent posted its steepest weekly drop in 18 months after U.S. President Donald Trump announced sweeping new tariffs, prompting swift retaliation from key trading partners. China, the world's largest oil importer, is now facing tariffs of more than 50% on its exports to the U.S. In response, Beijing imposed 34% tariffs on U.S. goods. Meanwhile, Trump on Sunday stated that he isn't deliberately causing the current market sell-off but remarked, "Sometimes you have to take medicine to fix something."

Weighing further on prices, Saudi Aramco, the top exporter, lowered crude oil prices for Asian buyers in May to their lowest in four months, after the OPEC+ alliance announced an unexpectedly large output hike, it said.

In India, the gap between petrol and diesel is minimal. Petrol is even higher than Rs 100 in metro cities like Kolkata and Mumbai. Diesel is expensive in cities like Kolkata, Mumbai, Chennai, Patna, and Jaipur with prices above Rs 90 per litre.

Petrol prices in India are influenced by a combination of international crude oil prices, domestic tax structures, and currency exchange rates. As of the latest data, the price of petrol in India has been observed to be significantly higher than in some of its neighboring countries.