Prices of petrol and diesel will be hiked by up to Rs 2.50 per litre after the Budget 2019-20 proposed to hike additional excise duty, road and infrastructure cess together by Rs 2 on each fuel.
Industry sources said that post imposition of local sales tax and Value added tax on the two fuels, petrol prices are expected to rise by Rs 2.50 per litre and diesel by Rs 2.30 per litre.
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Raising excise and cess is expected to garner Rs 28,000 revenue to the Centre this year.
On Friday, a litre of petrol costs Rs 70.51 in Delhi and Rs 76.15 in Mumbai. Diesel was priced at Rs 64.33 a litre in Delhi and Rs 67.40 a litre in Mumbai.
“Crude prices have softened their highs. This gives me a room to review excise duty and cess on petrol and diesel. I propose to increase special additional excise duty and road and infrastructure cess each by one rupee a litre on petrol and diesel,” Sitharaman said in her Budget speech.
The opposition said the high taxes on petrol and diesel will increase inflation and rise overall commodity prices.