By Admin 
Government on Petrol-Diesel Rate: After the Iran-America war, the prices of petrol and diesel were increased in the country. For the last several days, questions are being raised regarding the prices of petrol and diesel. Now in the Rajya Sabha, the Petroleum and Natural Gas Minister was asked a question regarding fuel prices and taxation. MP Chandrakant Damodar Handore asked whether the government has assessed the impact of high prices of petrol and diesel on the domestic budget and inflation?
In response to this question, Minister of State of the Ministry Suresh Gopi said that the impact of petrol and diesel prices on inflation is assessed on the basis of their weighting in the Wholesale Price Index (WPI). As…
- Petrol weight: 1.73%
- Diesel weight: 4.03%
Apart from this, a question was asked to the ministry in the Parliament that what are the details of taxes and cess (cess) collected by the Central Government on petrol and diesel in the last five years? In response to this question, Suresh Gopi said that the total revenue received by the Central Government from the petroleum sector (taxes, cess, royalty, customs duty, excise duty etc.) was as follows…
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Total revenue contribution (taxes, cess, royalty etc.) to the Central Government from the petroleum sector.
| financial year |
Total contribution to Central Government (₹ in crore) |
| 2021-22 | 4,92,302.5 |
| 2022-23 | 4,28,067.1 |
| 2023-24 | 4,32,394.1 |
| 2024-25* | 4,24,826.7 |
| 2025-26* | 4,75,739.0 |
Major items include Excise Duty, Custom Duty, Cess on Crude Oil, Royalty, IGST, CGST, Corporate Tax, Dividend and other charges.
Excise Duty only:
| financial year |
Total contribution to Central Government (₹ in crore) |
| 2021-22 | 4,92,302.5 |
| 2022-23 | 4,28,067.1 |
| 2023-24 | 4,32,394.1 |
| 2024-25* | 4,24,826.7 |
| 2025-26* | 4,75,739.0 |
Apart from this, it was asked in Parliament whether the government is planning to reduce fuel prices by rationalizing taxes? If yes then details, if no then what are the reasons?
In this reply, the Minister said that the prices of petrol and diesel are market determined and public sector oil marketing companies (OMCs) decide the prices considering the international market and other factors. However, the government has been intervening in the tax structure when necessary.
Major steps taken by the government…
- In November 2021 and May 2022, the Central Government reduced excise duty by Rs 13 per liter on petrol and Rs 16 per liter on diesel, the full benefit of which was passed on to consumers.
- In March 2024, oil marketing companies reduced the price of both petrol and diesel by Rs 2 per liter.
- In April 2025, the central government increased the excise duty on petrol and diesel by Rs 2 per liter, but its burden was not passed on to the consumers.
- In March 2026, there was a sharp increase in international crude oil prices due to the West Asia crisis. To provide relief to consumers, the government reduced excise duty on petrol and diesel by Rs 10 per liter.
According to the government, this cut had a significant negative impact on the tax revenue of the central government, but its purpose was to protect consumers from the impact of international oil prices.
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