In the budget 2018 Finance Minister Arun Jaitley announced the basic excise duty on petrol and diesel has been cut by two rupees per liter, but by raising the cess by Rs 2 in excise duty, there will be no change in the total excise duty. Unbranded diesel having basic excise duty of Rs 8.33 per litre was reduced to Rs 6.33 per litre.
According to the notification issued by the Ministry of Finance, the petrol price has been increased by Rs2.98 per litre. The Modi government also abolished additional excise duty on fuel by Rs 6.
Chief Minister Siddaramaiah ruled out cutting sales tax imposed on petrol and diesel, with the Centre announcing a slash in excise duty on these fuels.
However, there are some other factors as well that determine the prices of petrol and diesel.
This come at a time when the petrol price has crossed Rs 80 per litre in Mumbai.
"Thereby, the final price of petrol and diesel would remain unchanged for the consumer", Finance Secretary Hasmukh Adhia explained while speaking to a news channel. The government had in November 2015 and January 2016 raised excise duty on petrol and diesel five times to take away gains arising from plummeting worldwide oil prices. The price of high speed diesel oil has been increased by Rs5.92 per litre as against the proposal of increase by Rs10.25 per litre. Indian Oil Corp (IOC) Chairman Sanjiv Singh on Monday responding to the charges of government meddling in fixing of fuel prices said that Petrol and diesel prices in India are to a "large extent" aligned to global rates. The first factor is the price of crude oil in the worldwide market, the second factor is the value of Indian Rupee against US Dollar at the time of import. Today, price of petrol went up by 15 paisa per liter and that of diesel by 19 paisa.