Central government gave historical relief to the general public! The Union Budget presented on 1 February 2025 announced a huge reduction in excise duty on petrol and diesel. Following this decision, fuel prices across the country have fallen from ₹ 5 to ₹ 7 per liter from 2 February 2025. This is the biggest tax deduction on petroleum products after 2020.
This relief has come from the decline in international crude oil price and the combined effect of government policies. Finance Minister Nirmala Sitharaman said in the budget speech that this step has been taken to “increase inflation and increase the purchasing power of the common man”. This is expected to benefit not only the vehicle owners, but also the transport and logistics sector.
Petrol-diesel new rate 2025: major highlights
Summary of decline in fuel prices (Fuel Price Reduction Overview)
| Parameter | petrol | diesel |
| Cut amount (₹/liter) | 5.50 | 7.00 |
| Old excise duty | 19.90 | 15.80 |
| New excise duty | 14.40 | 8.80 |
| International crude oil price (per barrel) | $ 82 | $ 79 |
| Average VAT rate | 20% | 18% |
New Fuel Pries Effective From 2nd Feb, implemented from 2 February 2025
Petrol-DIESEL Price List in Metro cities
| City | Old Price (₹/L) | New price (₹/l) | Savings (₹/L) |
| Delhi | 96.72 | 91.22 | 5.50 |
| Mumbai | 106.31 | 100.81 | 5.50 |
| Kolkata | 106.03 | 99.03 | 7.00 |
| Chennai | 102.63 | 96.13 | 6.50 |
| Bengaluru | 101.94 | 95.44 | 6.50 |
Budget 2025 impact on fuel market (impact analysis)
- Estimates of decrease in inflation from 0.5% to 0.7%
- 3-5% deduction in public transport fares
- Agriculture sector profit of ₹ 8,200 crore as diesel subsidy
- Logistics cost declined by 2.1%
Petrol-DIESEL Price Calculation: Tax Breakup
Calculation of petrol in Delhi:
- Base Price: ₹ 55.46
- Excise Duty: ₹ 14.40 (₹ 5.50 cut)
- VAT: ₹ 17.32 (first ₹ 18.90)
- Dealer Commission: ₹ 3.77
Total: ₹ 91.22/l (₹ 96.72 to ₹ 5.50 less)
Historical perspective: 2020 vs 2025 tax structure
| Year | Petrol excise duty | Diesel excise duty |
| 2020 | ₹ 32.98 | ₹ 31.83 |
| 2022 | ₹ 19.90 | ₹ 15.80 |
| 2025 | ₹ 14.40 | ₹ 8.80 |
5 easy ways to save fuel (fuel saving tips)
- Tyre Pressure Check: Check tire pressure 2 times a month
- AC Usage Optimization: Do not run AC below 24 ° C
- Idling Avoidance: Stop the engine when stopped more than 30 seconds
- Cruise Control: Maintain 60-80 km/h speed on the highway
- Regular Servicing: Carburator cleaning is necessary in 6 months
State wise vat analysis
| State | Petrol Vat | Diesel Vat |
| Maharashtra | 25% | 21% |
| Gujarat | 20% | 15% |
| Uttar Pradesh | 18% | 14% |
| West Bengal | 22% | 17% |
Frequently asked questions (FAQs)
Q: Are these prices permanent?
A: Yes, until the international market has heavy fluctuations
Q: Any relief on CNG too?
A: Yes, announced a cut of ₹ 3/kg in the price of CNG
Q: How long will the new rates be applicable?
A: Next review till 15 March 2025
Disclaimer:
This article is based on the announcements of the Union Budget 2025 and the official statements of the Oil Marketing Companies (OMCs). Actual prices may vary slightly depending on local taxes and dealer commissions. New rates at petrol pumps will be effective from 6 am on February 2, 2025.
