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The hike in excise duty on petrol and diesel has been done to help the Centre raise money for deployment in welfare schemes while not burdening the consumer, Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, said on Wednesday.
“We inherited two major challenges of inflation and empty coffers. With the falling prices of crude oil we have undertaken several price cuts to pass on the benefit to consumers. By going in for excise duty hikes, we are mobilising the money to use it for other areas like welfare schemes,” Pradhan said after the Oil Industry Safety Awards here.
On Tuesday, the Government raised excise duty on petrol and diesel by ₹2.25/litre and ₹1/litre, respectively. This was the second such hike in less than a month after the ₹1.5 a litre excise duty increase on petrol and diesel on November 13.
The two hikes will help the Government raise an additional ₹10,000 crore in the four months to March.
Several price cuts Pradhan said that since the Narendra Modi-led Government took charge in May 26, petrol prices have been reduced by almost ₹9 a litre in several rounds of price cuts.
“We have been passing on the benefit to the consumers but now that inflation is under control we have shored up our revenues without burdening the consumers. The excise duty hike is being absorbed by the oil marketing companies,” he added.
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