The government of India has increased the excise duty on petrol and diesel by Rs. 2 per litre, but the retailing prices will be the same.
The price will be balanced by the retailers against the falling prices of crude oil internationally. The government is using the profit they make to build roads and improve the road infrastructure.
Since November 2014, this is the third time the government is increasing excise duty on fuels, thus making the fall in fuel prices only minimal compared to the drop in prices internationally.
State run retailers have cut prices of aviation fuel by INR 7,500 per kilolitre for domestic airlines and INR 6907 for international passenger carriers, according to industry experts.
A statement from the finance ministry said, "In order to fund the ambitious infrastructure development programme of the government, particularly the building of 15,000 km of roads during current and next financial year."
The higher duty, effective from Friday, could help the government fetch nearly INR 6,000 crore in the three months that remain of this financial year.
The crude oil barrel was priced at USD 53.53 (INR 3392.46) per barrel on the 31st of December 2014, as compared to its price a year ago, which cost USD 108.76 (INR 6892.66).