Hyderabad: Telangana BJP President N Ramchander Rao on Friday, March 27, welcomed the Central government’s decision to reduce excise duty on petrol products, stating that it would provide much-needed relief to the public.
He urged the state government to further reduce Value Added Tax (VAT) on fuel so that prices could decrease even more.
Speaking to a news channel, Rao claimed that India is currently among the few countries that have taken steps to lower petrol and diesel prices despite global volatility. He also reassured citizens that there is no shortage of fuel and advised against panic buying.
Details of excise duty cuts
According to a notification issued by the Finance Ministry late on March 26, excise duty on petrol has been reduced from Rs 13 per litre to Rs 3 per litre. Diesel has been fully exempted from excise duty, down from Rs 10 per litre earlier. The revised rates came into effect immediately.
The move aims to shield consumers from the sharp rise in global crude oil prices while also easing financial pressure on oil marketing companies, which have been absorbing losses to keep retail prices stable.
Global factors driving price surge
International crude oil prices have surged by nearly 50% following military tensions in the Middle East, particularly after the United States and Israel launched strikes against Iran on February 28. Prices had touched around $119 per barrel earlier in the month before stabilizing near $100 per barrel.
India, which imports about 88% of its crude oil and nearly half of its natural gas, is heavily dependent on supplies passing through the Strait of Hormuz. Recent geopolitical tensions and threats from Iran have disrupted shipping routes and insurance coverage, affecting global supply chains.
Impact on oil companies and markets
Despite rising global prices, state-owned oil retailers—who control nearly 90 percent of India’s fuel market—have kept retail prices unchanged. In Delhi, petrol continues to be priced at Rs 94.77 per litre, while diesel costs Rs 87.67 per litre.
However, private players have begun adjusting prices. Nayara Energy has increased petrol prices by Rs 5 per litre and diesel by Rs 3 per litre. Petrol at its outlets now costs Rs 100.71 per litre, while diesel is priced at Rs 91.31 per litre. On the other hand, Jio-bp, a joint venture between Reliance Industries and BP Plc, has so far maintained existing rates despite incurring losses.
Following the excise duty cut, shares of major fuel retailers such as IOC, BPCL, and HPCL opened higher on the Bombay Stock Exchange, reflecting positive market sentiment.
Industry outlook and expert view
Rating agency ICRA had earlier warned that if crude prices rise to $100–105 per barrel on average, oil marketing companies could face losses of ₹11 per litre on petrol and Rs 14 per litre on diesel.
It had also suggested that a reduction in excise duty would help stabilise retail prices and provide companies with financial breathing room.
(With excerpts from PTI)
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