Fuel Prices Get Relief as Government Cuts Excise Duty on Petrol, Diesel

New Delhi, March 2026: The central government on Friday announced a sharp reduction in excise duties on petrol and diesel by ₹10 per litre each, in a move aimed at easing the burden of rising global oil prices. With this cut, excise duty on petrol has been brought down to ₹3 per litre, while diesel has effectively been exempted from excise duty.

The decision comes at a time when global energy markets remain volatile due to geopolitical tensions, particularly the ongoing conflict involving the United States, Israel, and Iran, which has disrupted supplies through the Strait of Hormuz. These developments had raised concerns about a possible spike in fuel prices domestically.

In addition to the duty cuts, the government has also provided exemptions on duties for fuel exports and supplies to foreign-bound aircraft. Further relief has been extended to the aviation sector, with the Centre withdrawing a 2022 notification and granting customs duty exemptions on imported aviation turbine fuel (ATF), which is expected to reduce operational costs for airlines.

Despite the reduction in duties, oil marketing companies (OMCs) are likely to absorb much of the financial impact to offset their mounting losses. Industry estimates suggest that OMCs are currently facing losses of nearly ₹48.8 per litre on fuel sales due to elevated crude oil prices in international markets.

Meanwhile, global oil prices showed some easing, offering a degree of relief. Brent crude futures fell by 2.29 per cent to $105.53 per barrel, while US West Texas Intermediate (WTI) crude dropped 2.54 per cent to $92.08 per barrel in early trade.

Amid concerns over supply shortages, the government has reassured citizens that India’s fuel situation remains stable and secure. The Petroleum Ministry stated that the country has sufficient reserves to meet demand and urged people not to fall for misinformation being circulated to create panic.

According to official data, India currently has a total reserve capacity of 74 days, with about 60 days of stock cover available, including crude oil, refined products, and strategic reserves stored in underground caverns. The ministry also confirmed that supplies at retail fuel outlets across the country remain adequate.

“There is no shortage of petrol, diesel, or LPG anywhere in the country,” the government said, adding that procurement for the next two months has already been secured. Officials emphasised that India’s energy security remains strong despite global uncertainties.

The government also dismissed claims about insufficient reserves, stating that such assertions are misleading and unfounded. With proactive planning and stable supply chains, authorities remain confident of maintaining uninterrupted fuel availability in the months ahead.