“India” excise duty cut on petrol-diesel, to tackle inflation

On March 26, 2026, the Indian government issued an order to reduce gasoline and diesel excise taxes. To manage potential inflation induced by volatility in global oil supply during the Middle East crisis, which resulted in the closing of the Strait of Hormuz, a critical global crude oil shipping route, causing world oil prices to rise to 100 dollars /barrel. India is also the world's third-largest importer and consumer of oil, importing more than 90% of its supply.

"Government has taken a huge hit on its taxation revenues to ensure very high losses of oil companies, approximately 24 rupees a litre for petrol and 30 rupees a litre for diesel, at this time of sky high international prices, are reduced," Oil Minister Hardeep Singh Puri said in a post on X.

These move was issued by the Indian Finance Ministry, An order has been issued to cut the excise tax on gasoline to 3 rupees/liter (about 3 baht) from the previous 13 rupees/liter (about 4.5 baht), as well as cut the duty on diesel to zero from 10 rupees per litre. (about 3 baht). The Ministry did not specify the government's revenue loss as a result of this tax cut. However, this tax drop is regarded as a significant step to watch, particularly given this month's elections in four Indian states and one federal territory which are essential for the people and could result in price increases.

Madhavi Arora, an economist at Emkay Global, put the fiscal impact at around 1.55 trillion rupees per year. The reduction in import taxes will help to offset around 30%-40% of automobile gasoline marketing companies' present yearly losses.

India's Finance Minister, Nirmala Sitharaman, has indicated that the government will ensure that there are no shortages of gasoline, diesel, or jet fuel. Furthermore, this action will benefit oil marketing businesses that aim to maintain the petrol, diesel prices at current levels by protecting the public from increasing fuel prices and ensuring that jet fuel prices do not rise.

Finally, Indian Prime Minister Narendra Modi made the following statements. It was highlighted that the administration had made necessary preparations, such as obtaining fertilizers for summer crops and coal to fulfill the increased demand for energy.