The central government may again raise taxes on petrol and diesel by up to Rs 2 a litre to tap the windfall from lower international oil prices and use the additional revenue to fund initiatives against the coronavirus disease pandemic including an economic stimulus package, two officials familiar with the matter said.
India’s average crude oil purchase price, which factors in the rupee-dollar exchange rate, has dropped by Rs 309 per barrel since March 16, but state-run fuel retailers have suspended the daily price revision based on swings in global crude prices — an indication that the government may intervene and raise excise duty again, the officials said on condition of anonymity.
The National Democratic Alliance (NDA) government raised excise duty on the two fuels on March 14 by Rs 3 a litre. A Re 1 per litre hike in excuse duty would mean an additional Rs14,500 crore of revenue to the exchequer a year. Petrol is now sold at Rs 69.59 per litre and diesel at Rs 62.29 in Delhi.
