In response to rising global tensions and disruptions in oil supply, the Indian government has revised fuel taxes, significantly reducing excise duties on petrol and diesel.

Major Relief in Fuel Duties

As per the latest notification, the special additional excise duty on petrol has been reduced to ₹3 per litre from ₹13 earlier. For diesel, the duty has been completely removed, bringing it down from ₹10 per litre to zero. The move comes as global energy markets remain volatile due to ongoing tensions in the Middle East, particularly around the strategically important Strait of Hormuz, a key route for global oil shipments.

Global Oil Prices Show Signs of Cooling

After a sharp rise earlier, crude oil prices showed some easing. Brent crude dropped to around $105 per barrel, while West Texas Intermediate also declined. The dip followed signals from the United States about progress in diplomatic talks with Iran, which helped calm market sentiment temporarily. However, prices still remain significantly higher compared to pre-conflict levels.

Pressure on Domestic Fuel Prices

Despite the tax cuts, fuel prices in India have been under pressure. Private fuel retailer Nayara Energy recently increased petrol prices by ₹5 per litre and diesel by ₹3 per litre, citing higher input costs linked to global developments. The company operates a large network of fuel stations across the country and has passed on part of the increased costs to consumers.

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Balancing Economy and Supply Risks

The government’s decision aims to provide some relief to consumers while managing inflation risks and ensuring steady fuel supply. With the situation in the Middle East still evolving, policymakers are expected to continue monitoring global oil trends closely and may take further steps if needed.