In a move aimed at cushioning consumers from rising fuel prices, the Centre has reduced excise duty on petrol and diesel by ₹10 per litre each, while simultaneously imposing export duties on key petroleum products to safeguard domestic availability. The decision comes as global crude prices continue to climb amid geopolitical tensions in West Asia, putting pressure on oil marketing companies and retail fuel rates.
Export Duties Imposed to Protect Domestic Supply
To ensure sufficient fuel remains within the country, the government has introduced export duties of ₹21.5 per litre on diesel and ₹29.5 per litre on aviation turbine fuel (ATF). Officials said the measure is intended to discourage excessive exports and stabilise domestic supply chains at a time of heightened global uncertainty.
The dual approach—cutting excise while restricting exports—signals an effort to balance consumer relief with supply security.
Govt Calls Move ‘Decisive Intervention’
External Affairs Minister S Jaishankar described the step as a “swift and decisive intervention” led by PM Modi to shield citizens from global price shocks. He termed it a “#CitizenFirst” measure focused on maintaining affordability.
Union Home Minister Amit Shah also backed the move, highlighting that while several countries have increased fuel prices due to shortages, India has chosen to reduce the burden on consumers. Amit Shah said: “As the world is reeling under fuel shortages amid the West Asia crisis, driving up prices globally, the Modi government’s decision to cut excise duty on fuel brings much-needed relief to citizens. While many nations have hiked diesel and petrol prices, Modi govt’s decision to reduce excise duty underscores its people-centric governance and sensitivity-led decision-making.”
Union Minister Kiren Rijiju called the decision a difficult but necessary one taken in public interest. He added that even opposition leaders had acknowledged the government’s handling of the situation in recent discussions, while stressing that states have been directed to act against hoarding.
Opposition Flags Rising Import Dependence
Congress leader Jairam Ramesh criticised the government’s broader energy strategy, pointing to increasing dependence on imports.
Jairam Ramesh said, “Between 2014/15 and 2024/25, India’s dependence on crude oil imports went up from 84% to 90%. Between 2014/15 and 2024/25, India’s dependence on LPG imports went up from 46% to 62%. All this when the mantra was supposed to Atmanirbharta.”
“The natural gas story is murkier. On June 26 2005, the-then CM of Gujarat boasted that the Gujarat State Petroleum Corporation (GSPC) had discovered India’s biggest gas reserve in the deep waters of the Krishna-Godavari river basin. Modi announced that this would make India energy independent. 5 CAG reports between 2011 and 2016 were to reveal later that this was a Rs 20,000 crore scam which was subsequently covered by the PM forcing GSPC’s merger into ONGC in Aug 2017. The gas grandly promised by Modi has remained that—gas,” he said, as per ANI.
Economic Impact and Global Risks
Experts estimate that crude prices hovering around $100–105 per barrel translate into a hit of roughly ₹11 per litre on petrol and ₹14 per litre on diesel margins. With India heavily reliant on imports, fluctuations in global oil markets have a direct bearing on domestic inflation and consumption.
West Asia accounts for a significant share of India’s trade—estimated between 14% and 20%—making stability in the region crucial for economic balance. Any prolonged disruption in supply chains could impact fuel availability, pricing, and broader economic growth.
