Will petrol, diesel prices go down after excise duty cut by govt amid Iran war? Big question answered

THe telephone exchange authorities said on fri rock-bottom excise tax duty on domestic petrol and diesel by ₹10 per litre each to protect consumers from rising international oil prices, Finance Minister Nirmala Sitharaman said on Friday.At the same time, the government has imposed duties on exports of diesel by ₹21.5 per litre and aviation turbine fuel (ATF) by ₹29.5 per litre, to ensure these vital fuels remain available domestically amid the West Asia crisis and disruptions in global energy supplies, the finance minister added.The excise duty move comes amid disruptions in energy supplies globally due to the chokehold on key waterway Strait of Hormuz — through which a fifth of gas and oil requirements of the world move — as a result of the war in the Gulf region sparked by US-Israeli strikes on Iran. "In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each. This will provide protection to consumers from rising prices. Hon. PM @narendramodi has always ensured that citizens are protected from vagaries of supply and costs of essential goods," Sitharaman said in a post on X.Will this reduce petrol, diesel prices?The duty cuts are aimed at reducing oil companies' losses on auto fuels, without directly lowering pump prices of petrol and diesel. Same was reflected in petrol, diesel prices on Friday as they remained unchanged despite the excise duty cut decision.Further detailing the export duties, Sitharaman said, "This will ensure adequate availability of these products for domestic consumption. The Parliament has been notified about the same."Benchmark crude oil surged about 48.22% to $108.01 a barrel on Thursday from $72.87 before the start of the West Asia war on February 28."As the ME [Middle East] conflict nears one month, its impact on Indian downstream players is becoming more visible, with petrol-diesel accounting marketing margins of OMCs turning negative, at -Rs25/45 per liter this fortnight," Sabri Hazarika and Arya Patel of Emkay Global Financial Services Ltd said in a research report.Union minister for Petroleum and Natural Gas Hardeep Puri added that oil marketing companies were losing approximately ₹24 per litre on petrol and ₹30 per litre on diesel, and the duty reduction will provide much-needed relief.In a social media post, Puri said, "International crude prices have gone through the roof in the last 1 month from around 70 dollars/barrel to around 122 dollars/barrel. Consequently, petrol and diesel prices for consumers have gone up all over the world. Prices have increased by around 30%-50% in South East Asian countries, 30% in North American countries, 20% in Europe and 50% in African countries."He added, "The Modi Government had two choices- either increase prices drastically for citizens of Bharat as all other nations have done or bear the brunt on its finances so that Indian citizens are insulated from international volatility. Hon'ble Prime Minister @narendramodi Ji, in keeping with his Government's commitment of the last 4 years since the conflict in Russia-Ukraine started, decided to take a hit on its own finances again to safeguard the Indian citizen." Puri noted that the government has taken a huge hit on its taxation revenues to reduce the very high losses of oil companies amid skyrocketing international prices."At the same time, export tax has been levied as international prices of petrol and diesel have skyrocketed and any refinery exporting to foreign nations will have to pay export tax. My gratitude to Hon'ble PM Narendra Modi Ji and Hon'ble FM @nsitharaman Ji for this very timely, bold and visionary