How much is the recent hike in excise duty on petrol and diesel going to contribute to the coffers of the government?

The decision by the government to hike excise duty on petrol by Rs.10/litre and on diesel by Rs.13/litre will actually add Rs.140,000 crore to the coffers of the government. This is assuming that demand for both petrol and diesel will fall 12 per cent in FY20-21 due to the lag effect of the lockdown. This Rs.1.40 trillion is on top of an estimated Rs.2.8 trillion already being collected by the central government from the fuel tax/cess. This brings the total contribution to central exchequer from fuel taxes to Rs 4.2 trillion. Now the government is actually charging 134 per cent (Excise Duty and VAT) on the base price of petrol and 88 per cent in the case of diesel.