NEW DELHI — In a major move to offset surging international oil prices, the Indian government has drastically reduced the Special Additional Excise Duty (SAED) on motor fuels, effective immediately. The duty on petrol has been cut to ₹3 per litre, while the levy on diesel has been scrapped entirely.

The revision follows extreme volatility in global crude markets, which recently saw prices peak near $119 per barrel due to escalating tensions in West Asia and supply chain disruptions.

Key Tax Adjustments

The new notification replaces the previous levy structure to lower the domestic tax burden:

• Petrol: Duty reduced to ₹3 per litre (down from ₹13).
• Diesel: Duty eliminated to Nil (down from ₹10).
• Aviation Fuel (ATF): Revised to a special additional duty of ₹50 per litre, with specific exemptions and adjustments applied under different frameworks.

Market Context and Stability

This government intervention comes just a day after private retailer Nayara Energy raised its fuel prices, highlighting the rising input costs faced by the industry.

• Consumer Protection: By cutting these duties, the Centre aims to prevent a sharp spike in retail inflation and maintain price stability for transport and logistics.
• Global Volatility: While Brent crude has recently eased toward $107 per barrel following diplomatic signals from the U.S., analysts warn that prices may remain elevated between $85 and $110 in the near term.
• Supply Assurance: The government emphasized that these revised rates apply to domestic consumption and are intended to ensure the uninterrupted availability of essential commodities.