India has eliminated key excise duty on petrol and diesel prices to shield refiners from crude oil shocks emanating from the ongoing Iran war in West Asia. The Ministry of Finance announced that the special additional excise duty and additional excise duty on petrol have been cut to “nil”. For diesel, the government set the special additional excise duty at ₹18.5/litre and the additional excise duty at ₹3/litre.
These measures, effective immediately, arrive as Brent crude remains volatile near $100 a barrel. India, which imports ~88% of its crude oil, is seen as most vulnerable to the crisis in West Asia.
The effective closure of the Strait of Hormuz has seen daily transits drop from 120 vessels to just a handful, leaving nearly 20 million barrels per day at risk. However, India's oil marketing companies have absorbed the pain, maintaining a freeze on petrol and diesel prices.
Now, with the excise duty cut on petrol and diesel prices, the government has stepped in to shoulder the loss burden of its oil companies.
