Government Hikes Excise Duty on Petrol and Diesel by ₹2 per Litre

In a move expected to impact fuel prices across the country, the Government of India has increased the excise duty on petrol and diesel by ₹2 per litre. The decision, announced on April 6, 2025, is aimed at boosting government revenues amid fluctuating global oil prices and domestic fiscal pressures.

According to a notification from the Ministry of Finance, the revised rates have come into effect immediately. This marks the first excise duty hike in recent months, and experts believe it could lead to a marginal increase in retail fuel prices, unless oil marketing companies absorb the additional cost.

The increase in excise duty comes at a time when global crude oil prices have shown signs of volatility. The government’s move is likely intended to strengthen its revenue base, especially with increased spending commitments on infrastructure and welfare schemes.

Industry analysts have noted that while this hike may help bridge the fiscal gap, it could also lead to inflationary pressure, particularly affecting transport and logistics costs, which might trickle down to everyday commodities.

The last significant change in excise duty on fuel was witnessed during the COVID-19 pandemic, when the government raised taxes to compensate for reduced economic activity. Since then, rates have been adjusted periodically based on global and domestic conditions.

Consumers and transport associations have expressed concern over the potential rise in fuel prices, urging the government to reconsider or offer relief measures. Further responses from oil companies and state governments are awaited.