Centre raises excise duty on petrol, diesel; Congress says 'Shameful, inhumane, heartless'

Darnell Taylor
March 23, 2020

Latest Government figures show the average price for a litre of fuel at United Kingdom forecourts on March 16 was 120.3p for petrol and 124.4p for diesel.

In a move which would help the government to raise excise duty on fuel further in future, the government has raised the cap on special additional excise duty on petrol and diesel to Rs 18 and Rs 12 per litre, respectively, as per the amendments in the Finance Bill passed in the Parliament Monday.

For the first time in the history of India, the Finance Bill was passed without any discussion as all the parties unanimously made a decision to adjourn the Parliament due to the Coronavirus outbreak.

According to a notification issued by the Central Board of Indirect Taxes and Customs, special excise duty on petrol was hiked by Rs 2 to Rs 8 per litre in case of petrol and to Rs 4 a litre from Rs 2 in case of diesel.

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The increase in excise duty would, in normal course, result in a hike in petrol and diesel prices.

If this happens, the retail price of petrol and diesel could shoot up by Rs 5-6 per litre as the remaining amount may be absorbed by public sector oil marketing companies who have been daily reducing the price of two petroleum products in line with global fall of oil prices. The said changes have been made by amending the eighth schedule of the Finance Act 2002. The excise duties on petrol and diesel include basic excise duty, special additional excise duty, and road and infrastructure cess, which is levied as additional excise duty. Additionally, the price hike on petrol and diesel will also multiple effects resulting in an increase of several essential products as well as services that would impact on the inflation.

The AA latest figures show that the cost of a litre of diesel has also dropped over the last month by more than 16 cent, down to a current level of 116.9c.

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