March 27, 2026
The Indian government has cut special additional excise duties on petrol and diesel to ease the impact of global oil disruptions triggered by the US‑Israel war with Iran.
A government order on Thursday reduced the additional excise duty on petrol to 3 rupees per litre from 13 rupees, and removed the duty on diesel entirely, down from 10 rupees.
The measures come after disruptions in the Strait of Hormuz and related tensions sent global crude prices higher. India, the world’s third‑largest oil importer and consumer, depends on supplies passing through Hormuz for roughly 40% of its energy needs.
Petroleum Minister Hardeep Singh Puri said the government opted to absorb the fiscal burden to shield citizens from sharp domestic price increases, choosing to “bear the brunt on its finances” rather than pass on international volatility to consumers. He added the move has taken a “huge hit” on taxation revenues.
Industry analysts and Indian media note that retail fuel prices may not fall immediately. The duty reductions are likely to be absorbed largely by oil marketing companies, which have been selling petrol and diesel at a loss amid soaring global prices. On Friday, petrol prices across major Indian cities remained mostly unchanged.
Prime Minister Narendra Modi is set to chair a meeting with state chief ministers to review preparedness amid the ongoing Middle East crisis.
Background: The Iran‑related conflict and Tehran’s actions around the Strait of Hormuz have disrupted oil and gas exports and driven up crude prices, a shock the International Energy Agency described as among the largest oil disruptions in history. India has also reported related supply issues, including LPG shortages and delays to tankers transiting the Gulf.