In a significant relief to domestic consumers amid volatile global crude oil prices, the Central government has announced a reduction in Central Excise Duty on petrol and diesel by ₹10 per litre each. The decision aims to cushion citizens from rising fuel costs driven by geopolitical tensions in the Middle East and fluctuations in the international oil market.
Union Finance Minister Nirmala Sitharaman announced the measure while addressing the 37th Foundation Day celebrations of the Small Industries Development Bank of India (SIDBI) in Mumbai. She stated that the government, led by Prime Minister Narendra Modi, has chosen to absorb the financial burden to ensure that inflationary pressures are not passed on to the common public.
The excise duty reduction is expected to result in an estimated revenue loss of nearly ₹1 lakh crore to the Central exchequer. However, the Finance Minister emphasized that public welfare and economic stability remain the government’s top priorities, and the Centre is prepared to bear the fiscal impact in the larger interest of the economy.
Outlining the government’s broader macroeconomic approach, Sitharaman highlighted a “3Fs” strategy focusing on Fuel, Fertilizers, and Foreign Exchange. Under this framework, the government is working to stabilize fuel prices and ensure adequate domestic supply, extend fertilizer subsidies to protect farmers from global price shocks, and manage foreign exchange reserves amid volatility triggered by rising gold prices.
She further noted that India’s current economic challenges are primarily driven by global uncertainties rather than domestic weaknesses. Reiterating confidence in the country’s economic fundamentals, she described the Indian economy as resilient and stable, while cautioning against the spread of negative narratives.
Additionally, the government has revised export duties on petroleum products to ensure sufficient domestic availability and prevent supply disruptions. The move is expected to provide dual benefits—offering relief to consumers at the retail level while also stabilizing operations for public sector Oil Marketing Companies (OMCs) facing pressure from global price volatility.