Centre Increases Excise Duty & Cess on High Speed Diesel [Read Notification]

The Central Government has increased excise duty and cess on High Speed Diesel(HSD) through a series of notifications issued on 11 April 2026. The changes were notified by the Ministry of Finance and have come into force with immediate effect.

The government stated that the decision was taken in view of the need for urgent action and in public interest. The revisions have been made by amending provisions under the Finance Acts of 2002 and 2018, along with the Central Excise Act, 1944.

As per the new notifications, multiple components of taxation on diesel have been increased:

• Special Additional Excise Duty on diesel has been revised to Rs. 24 per litre
• Road and Infrastructure Cess has been increased to Rs. 36 per litre
• Other related excise duty components have also been adjusted to Rs. 42 per litre and Rs. 31.5 per litre through amendments to earlier notifications issued in March 2026

These changes have been made by modifying the relevant schedules in the Finance Acts and updating earlier notifications to align with the revised rates.

The increase in Road and Infrastructure Cess is particularly linked to funding road development and other public infrastructure projects. The notifications clearly state that the revised rates are effective immediately, requiring oil marketing companies and other stakeholders to implement the new rates without delay.

In recent years, the government has relied on excise duty and cess on petroleum products as an important source of revenue. Global crude oil prices, fiscal requirements, and infrastructure funding needs usually influence such revisions.

The duty increase has also come at a time when there is tension in the Middle East, especially due to the Iran-Israel-US conflict. This has caused changes in global crude oil prices. The government has not directly said that the hike is because of the conflict. India depends heavily on imported oil, so global price changes affect the country. In such situations, the government may change taxes to manage revenue and deal with uncertain market conditions.

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