The Finance ministry has cut excise duty on petrol to Rs 3 a litre, from Rs 13 a litre earlier, while the levy on diesel has been slashed to nil from Rs 10 earlier, offering relief to oil marketing companies (OMCs) from a sharp spike in global crude oil prices triggered by the ongoing geopolitical conflict in the West Asia. The duty cuts are effective immediately. 

State-owned OMCs like IOCL, BPCL, and HPCL are facing severe financial strain as retail petrol and diesel prices remained frozen despite a nearly 50 per cent surge in international oil prices since February 28, when the United States (US) and Israel launched military strikes against Iran, triggering sweeping retaliation from Tehran.  

International oil prices touched $119 per barrel earlier this month, before pulling back to around $100 per barrel. A litre of normal petrol in Delhi continues to cost Rs 94.77, while the same grade diesel comes for Rs 87.67 a litre. India imports around 88% of its crude requirements, along with roughly half of its natural gas. A large portion of India's crude oil, gas, and fertilizers comes via the Strait of Hormuz. As conflict intensified, Iran blocked the strait, and insurers withdrew coverage, effectively halting tanker movements.