With the Indian basket of crude oils going below $35 a barrel, the government on Wednesday hiked excise duty on petrol by 30 paise a litre and on diesel by Rs.1.17 to gather additional revenue of Rs.2,500 crore.
Basic excise on unbranded petrol has been increased from Rs.7.06 per litre to Rs.7.36, and on unbranded diesel from Rs.4.66 per litre to Rs.5.83.
Finance minister Arun Jaitley said the increase in duty will yield an additional Rs.2,500 crore in the remainder of the current fiscal up to end-March 2016.
Along with other levies, the total cess on unbranded, or normal, petrol will come to Rs.19.36 per litre as against Rs.19.06 currently.
On unbranded diesel, the total excise duty, after including special excise duty, will be Rs.11.83 per litre as compared to the current Rs.10.66.
The basic excise duty on branded petrol has been raised from Rs.8.24 per litre to Rs.8.54, and on branded diesel from Rs.7.02 to Rs.8.19 per litre.
Excise duty was last raised on petrol by Rs.1.60 per litre and on diesel by 30 paise a litre.
State-run Indian Oil Corp (IOC) has announced price cuts on petrol by 50 paise a litre, and of diesel by 46 paise in Delhi, with corresponding decrease in other states, effective from Wednesday.
The oil marketer said that allowing for local levies, the price of petrol per litre from Wednesday will be Rs.59.98 in Delhi, Rs.65.53 in Kolkata, Rs.67.04 in Mumbai and Rs.60.28 in Chennai.
Diesel will cost Rs.46.09 a litre in Delhi, Rs.49.70 in Kolkata, Rs.53.28 in Mumbai and Rs.47.28 in Chennai.
The Indian basket of crude oils, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, plunged to $34.25 on Tuesday for a barrel of 159 litres, as per data compiled by the state-run Petroleum Planning and Analysis Cell.