The Centre’s decision to slash excise duty on petrol and diesel by ₹10 per litre each is primarily aimed at providing financial relief to Oil Marketing Companies (OMCs), with no immediate impact on retail fuel prices.
According to sources, despite the significant reduction in duties bringing petrol excise down to ₹3 per litre and diesel to zero — prices at fuel pumps are expected to remain unchanged for now. The move is intended to offset the mounting losses faced by OMCs due to the ongoing global energy crisis and volatility in crude oil prices.
The crisis has been exacerbated by tensions involving the US, Israel, and Iran, particularly after Tehran’s blockade of the Strait of Hormuz — a key route for nearly 20–25 million barrels of oil and gas supply daily. With India previously importing around 12–15 per cent of its crude through this corridor, the disruption has put pressure on supply chains and margins, prompting the government to intervene to stabilise the sector rather than pass on immediate benefits to consumers.
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