Excise Duty on Petrol and Diesel Hiked by Rs. 2; No change in Retail Price

To boost the infrastructure and to build better roads in country, government has increased excise duty on diesel and petrol by Rs. 2 a litre. Though the increase in excise duty on fuel will not affect the price the customer pay at filling station. Since November, its the third time when government has increased the excise duty. Earlier on December 2, the government has raised excise duty on petrol by Rs. 2.25 per litre and on diesel by Re. 1 a litre.

Finance ministry in a statement said the decision to raise the duty was made "in order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000 km of roads during current and next financial year".

With the increased excise duty, the government will gain nearly Rs 6,000 crore which will help in funding big infra projects. "Allocation of these resources to the road sector will also spur economic activity and employment generation arising from the road-construction sector," the ministry said.

On December 31, the global crude was traded at $53.53 a barrel which is half the price ($108.76) it used to be a year ago. On the global front, the crude was traded at its five-and-half year low and ended with its second-biggest annual decline ever. The fall in prices is majorly due to the pressure from a global oversupply.

Moreover in November, the Opec companies which comprises of 12 members from Middle East agreed to keep its production to 30 million barrels per day and are ready to take the crude prices as low as $40 per barrel.