New Delhi, March 28 -- The government on Friday cut excise duty on petrol and diesel by Rs.10 per litre each and imposed levies on diesel and aviation turbine fuel (ATF) exports, in a dual measure aimed at easing the financial strain on state-run oil retailers and ensuring adequate domestic stocks - though consumers will see no reduction in pump prices, with the duty relief instead being used to partially offset the heavy losses oil companies are absorbing to hold retail rates steady. The cut in special additional excise duty on petrol from Rs.13 a litre to Rs.3 and diesel, from Rs.10 per litre to 0, will lead to an estimated revenue loss of Rs.1.70 lakh crore if it lasts the full financial year. Finance minister Nirmala Sitharaman announced the reduction in special additional excise duty (SAED) in a post on X, saying the move "will provide protection to consumers from rise in prices." State-run retailers IOC, BPCL and HPCL have kept petrol at Rs.94.77 a litre and diesel at Rs.87.67 in Delhi since March 15, 2024. In addition to the levies on export of diesel and jet fuel, the government said all refiners have been directed to divert 50% of exported petrol and 30% of exported diesel to the domestic market. The petroleum ministry's statement put under-recoveries - notional revenue losses on every litre sold below cost benchmarked with international rates - at approximately Rs.26 per litre on petrol and Rs.81.90 per litre on diesel at current product prices. Benchmark Brent crude closed at $108.01 a barrel on Thursday, up approximately 48% from $72.87 before the conflict began on February 28, and was trading at $110.40 on Friday afternoon. India's monthly average crude oil import price, popularly known as the Indian basket, surged to $111.93 a barrel on the 27th day as compared to $69.01 in the previous month, registering a surge of 62.2%. Benchmark petrol jumped 70% at $127.67 this month compared to February and diesel spiked 108% to $178.76 a barrel, according to PPAC data. Petroleum minister Hardeep Puri said in his X post that crude had risen from around $70 to around $122 a barrel in the past month, and that petrol and diesel prices for consumers had risen 30-50% in Southeast Asian countries, 30% in North America, 20% in Europe and 50% in Africa. To be sure, the three state-run OMCs had accumulated significant net profits in the nine months preceding the conflict, when international crude prices were considerably lower than current levels even as pump prices remained unchanged since March 2024. Their combined net profit exceeds Rs.57,810 crore in first nine months of FY26, 192% up from Rs.19,768 crore they earned in the same period of FY25. The current losses represent, in part, an unwinding of those gains. The Friday cuts reverse a move from April last year, when the government raised SAED by Rs.2 a litre on both fuels to garner approximately Rs.34,000 crore annually without touching pump prices. That hike had itself followed two rounds of excise cuts in November 2021 and May 2022 - totalling Rs.13 a litre on petrol and Rs.16 on diesel - which had been used to reduce pump prices when crude spiked during the Russia-Ukraine conflict. Including other duties and cesses, total central excise on petrol falls from Rs.21.90 to Rs.11.90 a litre, and on diesel from Rs.17.80 to Rs.7.80, CBIC chairman Vivek Chaturvedi said. On petrol, the remaining levies comprise basic excise duty of Rs.1.40, agriculture infrastructure and development cess of Rs.2.50 and road and infrastructure cess of Rs.5; on diesel, basic excise duty of Rs.1.80, agriculture infrastructure and development cess of Rs.4 and road cess of Rs.2. Since SAED is not part of the divisible pool shared with states, the entire revenue impact falls on the central government. Chaturvedi estimated the cuts would cost the exchequer approximately Rs.7,000 crore in a fortnight; the export levies on diesel and ATF are expected to recoup around Rs.1,500 crore over the same period. If maintained for a full financial year, the annualised cost of the duty cuts would amount to approximately Rs.1,70,000 crore, an industry expert said, requesting anonymity. The government will review both duties every fortnight depending on the oil price situation, Chaturvedi said. Petrol has been kept outside the export levy for now. On the export front, duty on diesel has been levied at Rs.21.5 a litre and ATF at Rs.29.5 a litre to disincentivise exports.India is a major refining hub, with companies such as Reliance Industries, importing crude, refining it, and exporting fuel. Shares of Reliance closed 4.60% down at Rs.1,348.10 apiece on Friday, even as the BSE's benchmark Sensex fell 2.25% to 73583.22 points. Petroleum ministry joint secretary Sujata Sharma said all refiners have been mandated to divert 50% of exported petrol and 30% of exported diesel to the domestic market, to ensure availability does not tighten further amid the global supply disruption. "The excise duty cut is not only a relief to OMCs but also to the consumers. Unless the government had given excise duty relief, OMCs would be compelled to raise prices because of a spike in international oil prices," said M S Mani, partner at Deloitte India. The pressure on OMCs is already visible in the market. Private refiner Nayara Energy - the country's largest private fuel retailer with over 7,000 pumps - on Thursday raised petrol by Rs.5 a litre and diesel by Rs.3, becoming the first oil marketing company to revise auto fuel rates since the conflict began....