The Indian government has made a strategic move to stabilize the energy market by slashing the Special Additional Excise Duty (SAED) on auto fuels. In a gazette notification issued on March 26, the Finance Ministry reduced the duty on petrol from ₹13 to ₹3 per litre, while the duty on diesel was cut entirely to nil.
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Despite this significant reduction, retail prices at the pump remain unchanged today, March 28, 2026.
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Why Haven’t Prices Dropped for Consumers?
While a duty cut usually signals lower prices, this specific intervention is designed as a “buffer” for Oil Marketing Companies (OMCs). Currently, these companies are grappling with a massive surge in global crude oil prices, fueled largely by the ongoing US-Iran conflict.
According to Oil Minister Hardeep Singh Puri, OMCs are absorbing losses of nearly ₹24 per litre on petrol and ₹30 on diesel. The excise duty cut is intended to offset these under-recoveries, preventing a further hike in retail prices rather than bringing them down immediately.
Fuel Prices Across Major Cities (March 28)
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| City | Petrol (per Litre) | Diesel (per Litre) |
| Delhi | ₹94.77 | ₹87.67 |
| Mumbai | ₹103.54 | ₹89.97* |
| Kolkata | ₹105.41 | ₹91.76* |
| Chennai | ₹100.80 | ₹92.39* |
| Bengaluru | ₹102.96 | ₹90.99 |
| Hyderabad | ₹107.50 | ₹95.70 |
*Estimated based on previous state VAT margins.
Investigative Insight: The Impact of Geopolitics
The decision to bring the special excise duty on diesel to zero is a rare and aggressive move. It highlights the government’s concern over “imported inflation.” Because diesel powers the majority of India’s logistics and farming sectors, any price hike here would immediately increase the cost of food and essential goods. By sacrificing tax revenue now, the Ministry of Finance is attempting to prevent a broader economic slowdown.
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