As the government increased excise duty on petrol and diesel by Rs 3 a litre—the steepest since 2012 even as global crude prices fell to unusually low levels—Indians can give up hope of a lower fuel price. The steepest hike since 2012, it is expected to shore up the government’s revenue by about Rs 40,000 crore for the full year amid a tight fiscal situation.

Besides, special additional excise and road and infrastructure cess on petrol and diesel has been hiked by a total of Rs 3 per litre. The change in prices came into effect from Saturday.

While retail prices of petrol and diesel have not been hiked yet, it is clear that the customers may not be able to get any benefits of lower crude prices. However, in the last two months, petrol and diesel prices have dropped by more than Rs 6 a litre. The hike in prices could, however, have inflationary impact on the economy.

Crude oil prices, which were over $65 per barrel in January fell to a level of about $51 a barrel in the first week of March, but since then, prices have nosedived and currently hovering around $32 a barrel. This has given a huge boost to the country’s macroeconomic indicators. The current account deficit (CAD)—the difference between inflow and outflow of foreign exchange declined to 0.2 per cent of gross domestic product. In the October-December quarter compared to 0.9 per cent in the July-September period and 2.7 per cent in the corresponding period of the previous financial year.

Analysts expect global prices to remain subdued for the next few months as the world tries to grapple with the deadly impact of the spread of coronavirus. Over 1,000 deaths have been reported globally on account of the novel coronavirus. Two days ago, President Donald Trump banned all inbound travel in to the US from Europe. The US is the world’s largest consumer of oil..