The government has increased the cap on special additional excise duty on petrol and diesel by Rs 18 and Rs 12 per litre, according to amendments passed in the Finance Bill.

The current cap on the same was Rs 10 for petrol and Rs 4 for diesel.

On March 14, the Centre increased the excise duty on petrol and diesel by Rs 3 a litre each. An additional Re 1 per litre was also levied on both petrol and diesel under the road and infrastructure cess (RIC).

The March 14 excise duty hike had reportedly helped the government collect over Rs 2,000 crore.

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While the benefit of reduction of crude prices in the first quarter of 2020 has significantly gone to the consumer, the government has taken this step of increasing duty to raise some revenue in view of a tight fiscal situation. This would help in generating resources for the development of infrastructure.

The increase in excise duty would, in normal course, result in a hike in petrol and diesel prices. But, most of it is going to be adjusted against the fall in rates that would have necessitated because of the slump in international oil prices.