The fall in international oil prices had resulted in six consecutive reduction in petrol prices since August and two in diesel in the last one month and there was possibility of another round of cuts this weekend.
But the possible reduction has now been negated as the the government decided to raise excise duty to shore up its revenue.
Excise duty on normal or unbranded petrol was hiked from Rs 1.20 per litre to Rs 2.70 per litre and unbranded diesel from Rs 1.46 a litre to Rs 2.96, a government notification said.
While the excise duty hike will result in an immediate increase in both petrol and diesel prices, the expected reduction would keep the retail rates at almost the same levels.
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Before the duty hike, petrol cost Rs 64.25 a litre in Delhi and diesel Rs 53.35 a litre.
Unbranded petrol currently attracts a basic excise duty of Rs 1.20 per litre, a special additional excise duty of Rs 6 a litre and a road cess of Rs 2 per litre. Unbranded diesel attracts a basis excise duty of Rs 1.46 a litre and road cess of Rs 2 per litre.
Branded petrol currently attracts an excise duty of Rs 10.35 per litre which would go up to Rs 11.85 per litre and that on branded diesel from Rs 5.75 to Rs 7.25 per litre.