Union Budget 2018: Petrol and diesel to get cheaper, excise duty reduced

Union Budget 2018: Petrol and diesel to get cheaper, excise duty reduced

Arun Jaitley’s Budget 2018 will bring under control the sky-rocketing fuel prices in the country by reducing excise duty. The Budget reduced basic excise duty on branded and unbranded petrol as well as diesel.

Unbranded Petrol which attracted excise of Rs. 6.48 per litre has been reduced to Rs. 4.48 per litre. Branded petrol has basic excise duty of Rs. 7.66 per litre which has been slashed to Rs. 5.66 per litre.

Unbranded diesel having basic excise duty of Rs. 8.33 per litre was reduced to Rs. 6.33 per litre. Basic excise duty on branded diesel was also reduced from Rs. 10.69 per litre to Rs. 8.69 per litre.

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According to a report by BP Global, India imports about 80 percent of the oil consumed in the country. Government levies kept the prices high even as price of Brent retreated from $115 a barrel in 2012 to $28 in early February 2016. The fossil fuel began firming up again again on account of production cuts by the Organization of Petroleum Exporting Countries (OPEC) in January last year.

Ministry of petroleum and natural gas in consultation with the finance ministry on 3 October 2017 lowered excise duty on petrol and diesel by Rs 2 each.

However, the central levy on fuels is still twice of what was charged three years ago. Demand for petrol and diesel dipped in the calendar year 2017, keeping prices in check. Fuel consumption rose 4 percent in 2017 in comparison with 7 percent growth in each of the previous two years.

Currently, India has 56,190 fuel retail outlets, including state-run and private, which sell petrol and diesel of firms such as Indian Oil Corp. Ltd (IOC), HPCL and Bharat Petroleum Corp. Ltd (BPCL). The other firms involved in the fuel retail are Numaligarh Refinery Ltd and Mangalore Refinery and Petrochemicals Ltd. Also, private entities such as Reliance Industries Ltd, Essar Oil (acquired by Roseneft) and Shell India also retail petroleum products.