Excise duty on petrol slashed to Rs 3, diesel zero amid West Asia crisis

Government absorbing loss to OMCs: Centre

Minister for Petroleum and Natural Gas Hardeep Singh Puri said, “Government has taken a huge hit on it taxation revenues to ensure very high losses of oil companies (approximately 24 Rs/litre for petrol and 30 Rs/litre for diesel) at this time of sky high international prices are reduced. At the same time, export tax has been levied as international prices of petrol and diesel have skyrocketed and any refinery exporting to foreign nations will have to pay export tax.”

Finance Minister Nirmala Sitharaman said: “In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by Rs 10 per litre each.” She said the move will provide protection to consumers from rise in prices and they are protected from “vagaries of supply and costs of essential goods”.

In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each. This will provide protection to consumers from rise in prices. Hon. PM @narendramodi has always ensured that citizens are protected from…

— Nirmala Sitharaman (@nsitharaman) March 27, 2026

Union Home Minister Amit Shah said: “As the world is reeling under fuel shortages amid the West Asia crisis, driving up prices globally, the Modi government’s decision to cut excise duty on fuel brings much-needed relief to citizens.”

What does reduction in petrol, diesel excise duty mean for you?

A reduction in excise duty on petrol and diesel means the government is collecting less tax per litre of fuel sold. This directly lowers the base price of fuel. However, no announcement on any change in the retail price due to the excise duty cut has been made so far either by the government or oil marketing companies.

The impact of the reduction in excise duty of petrol and diesel could translate into macro-economic benefits. If the base price of fuel comes down, transportation would be cheaper, which would eventually bring down the cost of goods and services.

Sitharaman, however, said the government took this decision to ensure that OMCs do not stop buying crude oil so that there is no shortage of fuel in the country. “We have raised the excise duty on export of ATF to ensure its availability in the country,” she added.

#WATCH | Delhi | On Government slashing excise duty on petrol, diesel, Union Finance Minister Nirmala Sitharaman says," The way the PM responds to such situations, in this case to ensure that the public is not burdened by shortage of LPG or fuel, the PM said that the price for… pic.twitter.com/NCbrEpOFiP

— ANI (@ANI) March 27, 2026

External Affairs Minister S Jaishankar said central excise duty on petrol and diesel for domestic consumption had been cut by to cushion consumers from rising prices.

ALSO READ | Oil markets are paying the price for Trump’s chaos

Timing crucial

The timing of the excise duty cut is crucial. This comes amid concerns over reports of fuel supply running low in some regions. OMCs have, however, assured there is no fuel shortage and panic is unfounded. “Fuel supplies across the country remain normal and fully available, and there is no shortage. We urge everyone not to be misled by rumours or misinformation and to continue with regular refuelling patterns,” Bharat Petroleum said on Thursday.

Addressing reports of panic-induced hoarding of petrol and diesel, BPCL warned that storing or transporting fuel in bottles, drums, or loose containers is unsafe and poses serious fire hazards.

Indian Oil, too, assured that all its retail outlets are fully operational, and LPG distribution continues as normal. “There is no shortage of fuel or cooking gas,” the OMC said.

WEST ASIA WAR | GET THE LATEST UPDATES ON THE MIDDLE EAST CRISIS HERE