The government on Thursday hiked excise duty on petrol and diesel. While unbranded petrol excise duty has been hiked to Rs 2.70/litre from Rs 1.20/litre, the duty on unbranded diesel has been raised to Rs 2.96/litre from Rs 1.46/litre.



However, the excise duty hike is unlikely to affect fuel prices for consumers. Oil companies are likely to cut petrol and diesel prices this Saturday due to sliding global prices.



But the quantum of the price cut may be lower due to the excise duty hike. Those expecting further relief in prices, may be in for disappointment, as the excise duty hike may offset the likely reduction in prices.There is a possibility that cut may be put off altogether, as well.



The government's move to hike excise duty is aimed at getting higher revenues in its coffers.

If prices are cut this Saturday, it would be the seventh reduction in petrol prices since August and the third in rates of diesel since its decontrol last month.

Diesel price was for the first time in more than five years cut on October 19, by Rs 3.37 a litre, when the government decided to deregulated the fuel. This was followed by another cut on November 1.





Prior to the October 19 reduction, diesel rates were last cut in January 2009.

Following their fortnightly review practice, state-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) are due to revise rates of petrol and diesel on Saturday.

(With PTI inputs)



