Taking a big decision in the Union Budget 2018, the Narendra Modi government on Thursday decided to cut excise duty on petrol and diesel by Rs 2. With this move, prices of petrol and diesel are expected to come down.
Notably, the prices of petrol and diesel have been increasing in the recent past due to the rising price of crude oil in international market and weakening Indian Rupee. According to data from the website of the Indian Oil Corporation, petrol price went up by Rs 2.95 in Delhi last month.
Reduction in excise duty:
The government has cut excise duty by Rs 2 and it now stands at Rs 4.48 per litre. On diesel as well, the excise duty has been cut by Rs 2 to reach Rs 6.33 per litre.
How prices of petrol and diesel are determined:
Oil marketing companies determine the prices of petrol and diesel on the basis of three factors. The first factor is price of crude oil in international market, the second factor is the value of Indian Rupee against US Dollar at the time of import. The third factor that determines the fuel prices is the prices of petrol and diesel in international markets.
However, there are some other factors as well that determine the prices of petrol and diesel.