In response to concerns over rising fuel prices amid global tensions, the Indian government has announced a significant reduction in excise duties on petrol and diesel. Starting Friday, the excise duty on petrol has been slashed to Rs 3 per litre, while the excise on diesel has been reduced to zero. This move comes after fears that the ongoing US-Israel conflict with Iran could lead to higher fuel prices, especially as global crude prices surged past $100 per barrel.

Despite the duty cuts, industry sources suggest that consumers may not see a significant drop in prices at the pump. Oil marketing companies (OMCs) are facing substantial losses, with reports indicating a loss of Rs 48.8 per litre on both petrol and diesel due to the sharp rise in crude prices. As a result, much of the duty reduction might be absorbed by the OMCs to mitigate these losses.

Petroleum Minister Hardeep Singh Puri addressed the situation, stating that global crude prices have increased drastically, rising from around $70 to over $120 per barrel in the last month. This surge in prices has led to an increase in fuel prices globally, with countries in Southeast Asia, North America, Europe, and Africa witnessing price hikes of up to 50%.