The government has raised the cap on special additional excise duty on petrol and diesel to Rs 18 and Rs 12 per litre, respectively, as per the amendments in the Finance Bill passed in the Parliament.
This would help the government to raise excise duty on fuel further in future.
Last year’s Finance Act had put the cap at Rs 10 per litre for petrol and Rs 4 per litre for diesel. The change in the cap will enable the government to raise duties on petrol and diesel by another Rs 8 per litre each.
Every rupee hike in excise duty is expected to yield roughly Rs 13,000-14,000 crore annually. The slump in global crude oil prices enables the government to raise these duties substantially without immediately putting the burden on the consumer.
But there is expected to be a demand slowdown for fuels with a nearly country wide lockdown in the wake of coronavirus. With airlines, railways, trucks and passenger cars going off the roads, petrol, diesel and ATF (aviation turbine fuel) consumption is expected to fall drastically.
The excise duties on petrol and diesel include basic excise duty, special additional excise duty, and road and infrastructure cess, which is levied as additional excise duty.
Source : Indian Express