Budget Byte: How far will fuel excise duty help govt's fiscal plans?

After plummeting to a multi-decade low after the Covid-shock, price of Brent crude has recovered only partially. But despite low oil prices, retail prices of petrol and diesel have remained higher than pre-Covid times, courtesy a hike in fuel taxes (excise duties). This has happened even if the exchange rate has beel relatively stable.

This has helped the government have one healthy revenue stream in FY21, and help contain the deficit. Though high priced than before, petrol and diesel consumption came back to pre-Covid levels in recent months. And fuel tax hikes at the right time gave the government a higher monthly revenue than pre-Covid times, providing a cushion to the revenue shock.