Government cuts the excise duty on petrol and diesel by Rs 2 . Revised Price list in Indian Cities

After lot of pressure from public and opposition, the government has reduced the basic excise duty on petrol and diesel by Rupees 2 / Liter. As said in notification, This price change is applicable effective from today ( 4th October 2017 ). Central Government also advised state government to reduce the VAT on the petrol diesel price in their respective states. This Basic Excise duty reduction will bring net loss to the extent of Rs. 25000 Crore in the Tax collection budget.

After the revision of Excise duty, petrol diesel price rates are stand as follows in Indian metros

Revised Petrol diesel price after the Excise duty change

From 04-Oct-17

City Petrol diesel Unit
New Delhi 68.38 56.89 Rs. /Ltr
Kolkata 71.16 59.55 Rs. /Ltr
Mumbai 77.51 60.43 Rs. /Ltr
Chennai 70.85 59.89 Rs. /Ltr

Petrol diesel price before the Excise duty Revision

(Prior to 04-Oct-17)

City Petrol diesel Unit
New Delhi 70.88 59.14 Rs. /Ltr
Kolkata 73.62 61.8 Rs. /Ltr
Mumbai 79.99 62.82 Rs. /Ltr
Chennai 73.48 62.3 Rs. /Ltr

Government has worried about the raising inflation in last few months and decided to cut the excise duty on the petrol and diesel by notable number. The inflation has raised from 1.8 % to 3.4 % in the last month ( July to Aug’17) due to the price increase of many commodities. Also many criticized government for not reducing the petrol diesel price irrespective of the global crude oil price crash last year. All these factors are played major role in these kind of price reduction move.

Further, many of the experts seeks state governments to reduce the VAT on the petrol & diesel to desired level, to bring down the essential products price in the market, which may also reduce the inflation to some extent. Half of the Retail price in petrol diesel contributed by the tax portion of central and state government. For example in Delhi, The central government collects Rs. 22.05 / Litre as the central excise tax and state government collects Rs. 14.9 /Litre as VAT, which contributes to the total tax of Rs. 35 / Litre against Petrol price of Rs. 70 /Litre.

The discussion on petrol diesel price started few weeks ago, due to the marginal crude oil price increase in global market.

Petrol Diesel Price changes every day at morning 6 AM

Petrol diesel prices were changed every fortnight for past several years,  now by considering the volatility in the crude oil prices globally,  government has decided to change the fuel prices on a day to day basis. Normally petrol, diesel and fuel prices are getting changed / revised at midnight 12.00 Am,  hence petrol bunk / fuel station operators are changing the fuel rates at midnight.

Effective from 16-Jun-17, Petrol diesel price change is a day to day phenomenon, but fuel station / petrol bunk owners are not happy about the timing of the price change. They felt uncomfortable in receiving the correct information from oil companies at midnight and update the fuel pumps accordingly.  Hence fuel bunk owners/ Service station owners requested government to revise the timings to morning 6.00 AM instead midnight 12.00 Hours, which was accepted by the petroleum minister after the detailed discussion.

How to know the correct Petrol diesel Price ?

  • Oil companies fix the rates for the next day
  • The rates will be published by oil companies and SMS message will be sent to each fuel station
  • Also, One can send message to oil companies to seek the correct price for the particular day.
  • The price will be communicated separately for each station based on the local tax and duties.
  • The Price change will be automatically or by manual by the fuel pump / station owner at 6.00 AM in the morning

What are the advantages of daily petrol diesel price change

Consumer point of view, there are no significant advantage, but it helps oil companies to improve their margin based on the daily global crude oil prices. It is believed that, daily price change will bring the system more discipline and well organized.  Most of the western countries are already practicing the daily price change of gasoline / diesel / natural gas.