To restrict movement during the Lockdown period, the central government on Tuesday evening hiked the excise duty by a record Rs 10 per litre on petrol and Rs 13 per litre on diesel to garner Rs 1.6 lakh crore additional revenue at a time international oil rates are slumping low.
Retail prices of petrol and diesel will not be impacted by the tax changes as state-owned oil firms will adjust them against the recent fall in oil prices, industry officials said.
In two separate notifications issued by the Central Board of Indirect Taxes and Customs, special additional excise duty on petrol has been hiked by Rs 2 per litre and road cess has been hiked by Rs 8 a litre.
Meanwhile, in case of diesel, special additional excise duty has been hiked by Rs 5 per litre and road cess has been raised by Rs 8 a litre.
The changes will come into effect from Wednesday.
With this, the total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83.
This is the second time since March that the government hiked excise duty to mop up gains arising from fall in international oil prices. It had raised excise duty on petrol and diesel by Rs 3 per litre each in March to garner about Rs 39,000 crore.
Petrol and diesel prices have not been revised since March 16 despite international oil prices hitting rock bottom. The gains will now be adjusted against the excise duty hike.
Petrol costs Rs 71.26 a litre in Delhi and a litre of diesel comes for Rs 69.39.
Between November 2014 and January 2016, the Modi government has raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
The latest move of increasing duty has been made to raise some revenue in view of a tight fiscal situation, especially due to the pandemic situation.