The government on Friday slashed excise duties for petrol and diesel by Rs 10 per litre each, bringing the centre-imposed taxes down to Rs 3 per litre of petrol and making it zero for diesel.However, industry sources say the reduction is unlikely to translate into lower prices at fuel stations for most consumers as the cut will larely be absorbed by oil marketing companies (OMCs) to offset heavy losses on pump sales.
OMCs are currently losing Rs 48.8 per litre of petrol or diesel sold, in large part due to the surge in Brent crude prices; the global benchmark crossed US$100 per barrel red line after the US-Israel war on Iran and the Strait of Hormuz blockade.The excise duty cut also comes a day after Nayara Energy, the country’s largest private fuel retailer with an 8.4 per cent market share and backing by Russian company Rosneft and Kesani Enterprises, hiked petrol and diesel prices by Rs 5.3 and Rs 3 per litre.
The US-Israel war on Iran, and Tehran’s consequent Hormuz blockade, have severely disrupted oil and gas export from the wider West Asia region. The Hormuz is a critical energy supply channel for the world; pre-war approximately a fifth of global seaborne crude oil and gas – between 20 and 25 million barrels of crude and about 10 billion cubic feet of gas per day – was shipped via the narrow maritime channel.
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