Finance Minister Nirmala Sitharaman on Friday proposed to increase both the Special Additional Excise Duty and Road and the Infrastructure Cess by Rs 1 per litre on petrol and diesel. This will result in a rise in petrol and diesel prices by Rs 2 per litre in the country.

“Crude prices have softened from their highs, this gives me room to review excise duty and cess on petrol and diesel,” Sitharaman said while presenting her first Union Budget in Parliament. “I proposed to increase special additional excise duty and road and infrastructure cess each by Rs 1 per litre on petrol and diesel.”

Petrol was priced at Rs 70.51 in Delhi and Rs 76.15 per litre in Mumbai on July 4, while diesel was priced at Rs 64.33 per litre in Delhi and Rs 67.96 per litre in Mumbai.

The minister did not share the details of overall tax gain to the government as a result of the hike.

The Union Budget of 2018-’19 had cut the basic excise duty on petrol and diesel by Rs 2 per litre, but the move did not result in reduction of fuel prices as the cut in duty had been offset by an additional levy of Rs 8 per litre under the Road and Infrastructure Cess on petrol as well as diesel.

While it has been a common practice to cut duties when global crude prices increased, since 2014, the government has often increased excise duty despite a fall in global prices to increase their revenue, according to Business Today.

The Centre collected over Rs 2.57 lakh crore from taxes on petroleum products in the previous financial year, which is a massive jump from the gross revenue collection of around Rs 88,600 crore in 2013-’14.