New Delhi, India — March 27, 2026
In a major move to ease pressure on fuel retailers, the Indian government has slashed central excise duty on petrol and diesel by ₹10 per litre, offering significant relief to oil marketing companies grappling with rising global crude prices.
The decision, notified by the Finance Ministry on March 26, comes amid escalating geopolitical tensions in West Asia that have pushed international oil prices sharply higher.
Excise Duty Cut: Key Changes
Under the revised structure:
- Petrol excise duty reduced from ₹13 to ₹3 per litre
- Diesel excise duty reduced from ₹10 to ₹0 per litre
The government stated that the reduction has been implemented with immediate effect to stabilize the domestic fuel market.
Relief for Oil Marketing Companies
The move is expected to benefit major state-run fuel retailers including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, which have been under significant financial strain.
Despite rising global crude oil prices, these companies had largely kept retail fuel prices unchanged, absorbing losses to avoid passing the burden onto consumers.
Why the Decision Matters
Global crude oil prices surged nearly 50% amid ongoing conflict in West Asia, creating a sharp mismatch between input costs and retail fuel prices in India.
According to rating agency ICRA:
- Petrol losses could reach ₹11 per litre
- Diesel losses could go up to ₹14 per litre
if crude oil prices remain around $100–105 per barrel.
Current Fuel Prices in India
As of now, fuel prices in Delhi remain stable:
- Petrol: ₹94.77 per litre
- Diesel: ₹87.67 per litre
However, private players have started adjusting prices.
Private Retailers Begin Price Hike
Nayara Energy has increased fuel prices at its outlets:
- Petrol: ₹100.71 per litre
- Diesel: ₹91.31 per litre
Meanwhile, the joint venture between Reliance Industries and BP, operating as Jio-bp, has so far held prices steady despite ongoing losses.
State-run companies, which control nearly 90% of the fuel market, have also maintained price stability for now.
Supply Concerns: Strait of Hormuz Impact
India imports nearly 88% of its crude oil and about half of its natural gas, with a significant portion transported through the Strait of Hormuz.
Recent disruptions in the region have raised concerns over supply chains, as tanker movement has been affected due to geopolitical tensions.
