Fuel duty cut to cost exchequer Rs 7,000 crore in two weeks: CBIC chief

The Centre’s latest excise duty cut on petrol and diesel will result in a revenue loss of about Rs 7,000 crore over a fortnight, according to Central Board of Indirect Taxes and Customs chairman, Vivek Chaturvedi.

The estimate offers the first official indication of the fiscal impact of the government’s move to pare fuel taxes, aimed at cushioning consumers from elevated global crude prices and tempering inflationary pressures.

Also Read: Retail petrol, diesel prices won't change after Rs 10/litre tax cut, government says


The duty reduction — announced earlier in the day — is expected to immediately lower pump prices, with state-run oil marketing companies passing on the benefit to consumers. The move comes at a time when global oil markets remain volatile, keeping domestic fuel prices under pressure.

The Centre cut excise duty by Rs 10 per litre, with the government clarifying that the relief is being used to cushion losses of state-run oil marketing companies (OMCs) rather than being passed on to consumers.

While the cut provides near-term relief to households and businesses, it also carries implications for government finances. Excise duty on petrol and diesel has been a key revenue source for the Centre, particularly during periods of high crude prices when collections tend to rise.

Officials indicated that the Rs 7,000 crore estimate covers roughly two weeks following the duty revision, and that the situation would be reviewed overnight.

Also Read: India slashes special additional excise duty on petrol, diesel by Rs 10 per litre

The latest reduction underscores the delicate balance policymakers face between supporting growth and managing fiscal pressures, especially as inflation risks persist and global energy markets remain unsettled.