Govt hikes excise duty on petrol and diesel

Amid fall in global crude prices, the government has raised excise duty on petrol and diesel, to shore up its revenues without stoking inflation. The duty on petrol has been raised by 30 paise a litre while that on diesel is up a steeper Rs 1.17 per litre. This move can add an extra Rs 2,500 crore to the exchequer for the rest of the fiscal, helping it bridge the expected deficit in the direct taxes in the current fiscal.

After including additional and special excise duty, the total levy on unbranded petrol will be Rs 19.36 per litre as against the earlier Rs 19.06. On unbranded or normal diesel, total excise duty after including special excise duty will be Rs 11.83 per litre compared to Rs 10.66 earlier. Basic excise duty on branded petrol has been raised from Rs 8.24 per litre to Rs 8.54 a litre and the same on branded diesel from Rs 7.02 to Rs 8.19 per litre. This is the second increase in excise duty in less than six weeks. Earlier on November 7, the government had raised excise duty on petrol by Rs 1.60 per litre and on diesel by 30 paise a litre.

The government’s receipts from excise duty collection during April-November period rose 67.1% to Rs 1.7 lakh crore partly on account of duty increase in fuels and withdrawal of duty benefits given to automobiles and consumer goods.