PrintKhabar Team
In a recent move, the Indian government has increased the special additional excise duty on petrol and diesel by ₹2 per litre. This decision, announced on April 7, 2025, has stirred widespread discussion across the country. Although this rise in excise duty on petrol and diesel may not directly increase consumer prices at the moment, it significantly impacts the broader economic environment, particularly in the energy sector, including LPG gas and LPG cylinder prices.
Why Was the Petrol Diesel Excise Duty Increased?
The primary reason behind this petrol diesel excise duty hike is the steep fall in international crude oil prices. The Indian government aims to capitalize on this decline by increasing duties to boost revenue without transferring the burden to consumers. Oil Minister Hardeep Singh Puri stated that oil marketing companies would absorb the increase in excise duties, thereby preventing any petrol price hike or diesel price hike at the retail level — at least for now.
Current Petrol and Diesel Prices in India
Despite the changes in excise duty, petrol diesel prices have remained stable. Here’s a quick look at petrol price in Delhi and other major cities as of April 2025:
Petrol price in Delhi: ₹94.77 per litre
Diesel price in Delhi: ₹87.45 per litre
Petrol price in Mumbai: ₹103.50 per litre
Diesel price in Mumbai: ₹94.27 per litre
These prices have not been revised following the excise duty increase, thanks to oil companies choosing not to pass the additional cost onto consumers. However, the long-term impact on petrol diesel price trends will depend on global oil rates and domestic fiscal decisions.
LPG Gas Cylinder Price Hike
While petrol and diesel prices have been maintained, there’s a significant update for domestic consumers relying on LPG gas. The government has announced a LPG gas cylinder price hike of ₹50, effective from April 8, 2025.
This LPG price hike affects both subsidized and non-subsidized cylinders:
For PMUY (Pradhan Mantri Ujjwala Yojana) beneficiaries, the LPG gas cylinder price has increased from ₹500 to ₹550.
For non-PMUY customers, the price of a 14.2 kg cylinder has gone up from ₹803 to ₹853.
This adjustment in LPG cylinder price is aimed at offsetting the revenue losses suffered by oil companies in recent months. The LPG gas price will now be reviewed every two weeks, adding an element of volatility for domestic consumers.
Petrol Diesel – Impact on Households and Economy
Though petrol price and diesel price remain unchanged for now, the dual blow of rising excise duty and LPG gas cylinder price hike is expected to strain household budgets. Transportation costs, while currently stable, could potentially rise if oil companies eventually decide to pass on the increased excise duties.
Moreover, the gas cylinder price hike directly impacts lower-income households, especially those outside the subsidy umbrella. With LPG prices increasing, the cost of cooking and other essential needs is likely to go up. The frequency of LPG price hike reviews also adds uncertainty for monthly household budgeting.
Petrol Diesel – Broader Economic Implications
From a macroeconomic perspective, the excise duty on petrol and diesel helps the government generate additional revenue, especially in times when global oil prices are low. This fiscal strategy allows for investment in public welfare and infrastructure without burdening the middle class through visible price hikes.
However, if crude prices rise again in the near future, maintaining current petrol diesel prices while managing increased duties could become a challenge. In such a scenario, consumers might face both a petrol price hike and higher LPG gas price, triggering inflationary pressure across sectors.
Conclusion
The increase in petrol diesel excise duty and the simultaneous LPG gas cylinder price hike represent a strategic move by the Indian government to balance fiscal health with market stability. While consumers have been spared immediate petrol price or diesel price hikes, the rising LPG price signals a shift in domestic energy costs.
In the coming months, the oil sector’s pricing strategy will be closely monitored by economists and households alike. As global crude oil rates fluctuate, so too will the delicate balance between excise duty, petrol diesel price, and the affordability of essential commodities like LPG gas.
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