The fourth excise duty hike since November will help raise additional revenue during the three months of the current fiscal as the government took advantage of a slump in global oil prices to nearly six-year lows to shore up revenue without stoking inflation.
The oil firms had yesterday skipped cutting rates of the two fuels despite international oil rates plunging to its lowest in nearly six years.
The excise duty hike will likely offset the retail rate reduction that was due because of slide in oil prices.
Petrol and diesel prices were last cut by Rs 2 per litre on December 15.
Oil companies review the prices of petrol and diesel every fortnight depending on international crude prices.
(With PTI inputs)