India reduced the central special additional excise duty on petrol and diesel by Rs 10 per litre [1].
The move aims to shield consumers from rising global prices for crude oil, fertilizer, and gold while curbing a potential spike in inflation [2, 3].
Union Finance Minister Nirmala Sitharaman addressed the decision during a SIDBI event in Mumbai, Maharashtra [4]. She said the decision followed a late-night meeting on March 26, 2026, involving Prime Minister Narendra Modi [3].
"I will delve into this because it has led to a lot of narrative around the country," Sitharaman said. "We need to understand the context in which the PM made the call" [4].
Following the reduction, the new special additional excise duty on petrol stands at Rs 3 per litre [5]. For diesel, the special additional excise duty was reduced to nil [5].
While the government lowered domestic taxes, it simultaneously implemented new export levies to manage fuel supplies. The government imposed an export duty of Rs 21.5 per litre on diesel [6]. Additionally, an export duty of Rs 29.5 per litre was placed on aviation turbine fuel (ATF) [6].
The announcement was officially made on March 27, 2026 [1, 2]. The measures represent a strategic attempt to balance domestic price stability against the volatility of the international energy market.
“The central excise duty on petrol and diesel was reduced by Rs 10 per litre.”
By slashing domestic excise duties while increasing export levies, the Indian government is attempting a dual-track strategy to stabilize the economy. This approach seeks to lower the immediate cost of living for citizens—reducing the inflationary pressure of fuel—while discouraging the outflow of fuel stocks to ensure domestic availability during a period of global price volatility.
