Government Slashes Additional Excise Duty On Petrol And Diesel To Provide Relief
https://img-2.outlookindia.com/outlook-money-magazine/summy-art-lg.svgSummary of this article
[*]Special additional excise duty on petrol reduced to “Nil”; on high-speed diesel set at ₹18.5 per litre in one category
[*]The reductions in central duties are expected to translate into lower retail prices of petrol and diesel at fuel stations nationwide, providing relief to households, transporters, and businesses, though final savings will depend on state-level taxes.
[*]Special additional excise duty on aviation turbine fuel fixed at ₹50 per litre, with exemptions capping the effective rate at ₹29.5 per litre in certain cases.
The Government of India has significantly reduced the special additional excise duties (SAED) on petrol and diesel through a notification issued on Thursday, March 26, 2026. This move is expected to provide relief to consumers by lowering the tax component in retail fuel prices amid global oil market uncertainties, including supply concerns related to geopolitical tensions.
According to the government order, the special additional excise duty on motor spirit (petrol) has been set at “Nil”. For high-speed diesel oil, the duty has been fixed at ₹18.5 per litre in one category. Another amendment introduces an additional excise duty of ₹3 per litre on diesel under a different schedule. These changes were notified through amendments to the central excise rules and duty structures and “shall come into force with immediate effect,” as stated in the Gazette notification.
On aviation turbine fuel (ATF), the order specifies a special additional excise duty of ₹50 per litre, alongside certain exemptions that cap the effective rate at ₹29.5 per litre in specific cases.
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Oil marketing companies (Indian Oil, Bharat Petroleum, and Hindustan Petroleum) are likely to pass on the benefits of the reduced duties to consumers at the pump, though the exact reduction in retail prices may vary across states depending on local Value Added Tax (VAT) and other cesses.
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