Mumbai: The Centre’s Rs 10 per litre cut in excise duty on petrol and diesel is unlikely to bring immediate relief to consumers, as the benefit appears to have been absorbed by oil marketing companies, said experts. Retail fuel prices in cities like Mumbai have remained unchanged.Industry data shows even as central excise duty was reduced, the base depot price of petrol was simultaneously increased by Rs 10 per litre, effectively neutralising the tax cut. As a result, petrol continues to retail at around Rs 103.45 per litre in Mumbai.Experts said the excise duty structure comprises four components, and the latest reduction applies only to the special additional excise duty. The other three—basic excise duty, agriculture infrastructure and development cess, and road and infrastructure cess— remain unchanged.Following the revision effective March 27, total excise duty on petrol has reduced from Rs 21.90 to Rs 11.90 per litre and on diesel from Rs 17.80 to Rs 7.80 per litre. However, claims that excise duty on diesel has been reduced to zero are misleading as multiple components of the levy continue to be charged. “The reduction is largely an internal adjustment to cushion oil companies against higher crude costs. There is no certainty that the benefit will be passed on to consumers,” said city-based petroleum dealer and pricing expert Kedar Chandak.While the central tax component has declined, state taxes such as VAT and cess are unchanged. In Mumbai, these levies continue at Rs 23.98 per litre while dealer commissions are steady at Rs 4.01. Consequently, the tax burden has reduced from Rs 45.88 to Rs 35.88 per litre, but without impacting the retail price.
