The government has increased excise duty on petrol and diesel by Rs. 1 a litre and Rs. 1.5 a litre respectively.
The hike has not been passed on to consumers and will be absorbed by the oil marketing companies.
This increase is the third increase in excise duty during the month of January. In this month alone, excise duty on petrol has gone up by Rs. 2.12 a litre and on diesel by Rs. 5.5 a litre.
Since November 2014, there have been nine rounds of excise duty hike on petrol and diesel. If all the hikes are combined, the excise duty on petrol has gone up by Rs. 11.77 a litre and on diesel by Rs. 13.47 a litre.
During April-December 2015, six of these increases on excise duty helped the government mop up Rs. 25,906 crore. Excise duty mop up during the first nine months of the fiscal 2015-16 is an all-time high.
Dharmendra Pradhan, Minister for Petroleum and Natural Gas defended the government’s strategy of utilising low crude oil price environment to raise excise duty on fuel.
He said that the while excise duty has been raised regularly, customers have also been given a benefit through a cut in fuel prices whenever possible.
Pradhan further stated that the money being raised through excise duty on fuel is also important for the government’s various welfare schemes.