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1-min read

Union Budget 2019: Not One, Here’s Why Petrol and Diesel Prices Will Rise by Rs 2 Per Litre

Currently the government charges Rs 7 per litre of SAED on both branded and un-branded petrol and Rs 1 per litre on diesel. Apart from this, Road and Infrastructure Cess of Rs 8 per litre is charged on both petrol and diesel.

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Updated:July 6, 2019, 8:03 AM IST
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Union Budget 2019: Not One, Here’s Why Petrol and Diesel Prices Will Rise by Rs 2 Per Litre
Image for Representation. (Image: Reuters)

New Delhi: Petrol and diesel prices are going to rise by Rs 2 per litre and not Rs 1, after finance minister Nirmala Sitharaman in her first budget speech on Friday proposed to increase Special Additional Excise Duty (SAED), as well as Road and Infrastructure Cess by Rs 1 per litre each on automobile fuels.

RATE The Budget

Currently the government charges Rs 7 per litre of SAED on both branded and un-branded petrol and Rs 1 per litre on diesel. Apart from this, Road and Infrastructure Cess of Rs 8 per litre is charged on both petrol and diesel.

“Crude prices have softened from their highs, this gives me room to review excise duty and cess on petrol and diesel. I proposed to increase special additional excise duty and road and infrastructure cess each one by Rs 1 per litre on petrol and diesel,” Sitharaman said.

The government has introduced Rs 8 per litre levy of Road and Infrastructure Cess on petrol and diesel but abolished the additional duty of Excise (Road cess) on motor spirit by Rs 6 per litre at the same time. As a result, there is a net impact of Rs 2 per litre addition on the levy of tax on petrol and diesel.

Thus the net increase of tax by Rs 2 per litre on fuel was offset by the Rs 2 per liter reduction in basic excise duty.

The previous Union Budget of 2018-2019 had cut basic excise duty on petrol and diesel by Rs 2 per litre. This however, did not result in reduction in fuel prices for consumers as the cut in duty had been offset by an additional levy of Rs 8 per litre under Levy of Road and Infrastructure Cess on petrol as well as diesel.

Petrol and diesel prices on Friday remain unchanged across the country for the third consecutive day .Price of one litre of petrol today stood at Rs 70.51 while diesel costs Rs 64.33 per litre in the national capital.

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