Published: 27 March 2026DriveSpark / India TV NewsEconomy
India's Fuel Prices Remain Unchanged Despite ₹10 Excise Duty Cut as OMCs Absorb Losses
A day after the Central Government's announcement of a ₹10 per litre excise duty cut on petrol and diesel, fuel prices at retail pumps across India remained unchanged on March 28, 2026. Oil marketing companies (OMCs) absorbed the cut to offset heavy losses incurred due to the spike in international crude oil prices.
Crude oil prices have surged nearly 50% this month following the West Asia conflict and the blockade of the Strait of Hormuz. Petrol is retailing at ₹94.72 per litre in Delhi and ₹103.44 per litre in Mumbai.
Despite the excise cut reducing government revenue by an estimated ₹1.75 lakh crore annually, consumers continue to bear remaining excise through basic excise, road and infrastructure cess, and agriculture infrastructure cess.
Analysts noted that the excise cut was a strategic move to create fiscal headroom for OMCs to gradually reduce retail prices if global crude stabilises.
0Mains angle
Q: Examine why retail fuel prices stayed unchanged despite the Central Government's 10 rupees per litre excise duty cut during the West Asia crude spike.
Answer (50 words):
Following the 10 rupees excise cut, oil marketing companies absorbed the reduction on 28 March 2026 to offset roughly 50 percent crude oil rise after the West Asia conflict and Strait of Hormuz blockade. Petrol stayed at 94.72 rupees Delhi, 103.44 Mumbai; revenue loss nears 1.75 lakh crore annually.
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Practice MCQ from this story
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Linked questionMedium
What percentage of India's LPG supply is vulnerable to disruptions in the Strait of Hormuz?
Explanation · Correct answer CIndia imports 60% of its LPG, and 90% of those imports pass through Hormuz, making about 54% of total LPG supply vulnerable.
Frequently asked questions
Why did fuel prices not decrease after India's ₹10 excise duty cut on petrol and diesel in March 2026?
Despite the **₹10 per litre excise duty cut** announced by the Central Government, fuel prices remained unchanged because **Oil Marketing Companies (OMCs) absorbed the cut** to offset heavy losses from a **~50% surge in international crude oil prices** due to the West Asia conflict and Strait of Hormuz blockade.
What are the current petrol prices in Delhi and Mumbai after the March 2026 excise duty cut?
As of **March 28, 2026**, petrol prices remained at **₹94.72 per litre in Delhi** and **₹103.44 per litre in Mumbai** — unchanged despite the excise duty cut, as OMCs absorbed the reduction to cover crude oil-related losses.
How much annual revenue does the government lose from the ₹10 excise duty cut on petrol and diesel?
The ₹10 per litre excise duty cut on petrol and diesel is estimated to reduce government revenue by **₹1.75 lakh crore annually**. However, consumers continue to pay remaining excise through basic excise, road and infrastructure cess, and agriculture infrastructure cess.
Why did crude oil prices surge nearly 50% in March 2026?
Crude oil prices surged **nearly 50% in March 2026** due to the **West Asia conflict** (US-Israel war with Iran) and the **Strait of Hormuz blockade**, which disrupted global energy supply chains — described as the largest energy disruption since the 1970s oil crisis.
What was the strategic reason behind India's excise duty cut on fuel if prices did not fall for consumers?
Analysts noted the excise cut was a **strategic fiscal move** to create headroom for OMCs to **gradually reduce retail prices** if global crude stabilises. It also reduced the government's share of the fuel price burden, easing future pricing flexibility for OMCs.
