Government Cut Excise Duties on Petrol and Diesel Amidst Crude Oil Price Surge
India's government has cut excise duties on petrol and diesel amid rising crude oil prices due to Middle East conflicts, aiming to shield consumers from inflationary pressures. Despite this step, retail price reductions may not be immediate, while small towns face supply challenges.
Highlights
- •India cuts excise duties on petrol and diesel
- •Retail fuel prices might not drop soon
- •Adequate crude oil supplies secured for two months
- •Panic buying reported in smaller towns
Crude oil prices have surged in recent months due to escalating tensions in the Middle East, particularly involving Israel, the US, and Iran. This disruption has affected global trade and supply chains, impacting fuel prices across many countries.
In response, India's government has decided to reduce excise duties on both petrol and diesel. The excise duty on petrol has been slashed from ₹13 per litre to just ₹4 per litre, while the duty on diesel has been completely abolished. This move is aimed at protecting consumers from the inflationary pressures of rising fuel costs.
Despite this reduction, experts suggest that retail prices might not see a significant decrease in the near future. The government's primary goal seems to be providing relief to oil marketing companies, which are facing financial losses due to higher crude oil costs.
Ensuring Domestic Fuel Supplies
To ensure a steady supply of fuel, India has secured an adequate stockpile from alternative sources. The Union Ministry of Petroleum and Natural Gas indicates that the country can expect sufficient crude oil supplies for at least two months to cover its requirements.
However, local challenges persist. Smaller towns are experiencing difficulties in receiving fuel deliveries as petroleum companies have switched to a cash-on-delivery system. This change has led to reports of panic buying across the nation, with sales increasing by over 15% in just two days.
