Petrol, diesel prices likely to drop on Wednesday due to excise duty cut

Prices of transportation fuels -- petrol and diesel -- are expected to come down on Wednesday in the wake of the government reducing the excise duty levied on both by Rs 2 per litre.

As per the Ministry of Petroleum and Natural Gas's calculations, the reduction in excise duty will decrease prices of petrol and diesel by Rs 2.50 and Rs 2.25 per litre respectively in New Delhi. 

"This measure would help reducing the prices of petrol and diesel and giving relief to consumers," the Ministry said in a statement.

"As a result of reduction in excise duty, the decrease in prices of petrol and diesel will be Rs 2.50 per litre and Rs 2.25 per litre respectively at Delhi." 

In effect, the government decision will act as a check against retail prices going up in case global crude rates rise further. 

Earlier, informed sources here had said that the reduction in retail prices will "likely be reflected" from Wednesday morning.

The three state-owned oil marketing companies (OMCs) -- Indian Oil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- revise prices of petrol and diesel on a daily basis and these are announced at 6 a.m.

Currently, an excise duty component of Rs 21.48 per litre is levied upon petrol -- and, consequent to the reduction in excise duty, this will come down to Rs 19.48.

In case of diesel, Rs 17.33 excise is charged per litre -- this will come down to Rs 15.33 per litre.

On October 3, Tuesday, the retail selling price of petrol in New Delhi was pegged at Rs 70.88, while that for diesel was at Rs 59.14 per litre.