The government has room to cut excise duty on petrol and diesel by up to ₹8.5 per litre without impacting its target for revenue from the tax on the two fuels.
Petrol and diesel prices hover at a historic high following a relentless increase in rates over the past nine months. There have been calls by opposition parties as well as sections of society to the government to reduce excise duty to ease consumer pain.
Excise duty was raised by ₹13 and ₹16 per litre on petrol and diesel between March 2020 and May 2020, and now stands at ₹31.8 on diesel and ₹32.9 per litre on petrol.
The increase in excise duty was to mop up gains arising from international crude oil prices falling to a two-decade low.
