&imwidth=800&imheight=600&format=webp&quality=medium "India cuts petrol and diesel taxes — but prices for consumers to stay the same. Here's what FM Sitharaman said")
The government of India, on Friday (Mar 26) slashed special additional excise duties on petrol and diesel — petrol down to ₹3 per litre from ₹13, and diesel all the way to zero from ₹10. Aviation turbine fuel got a full exemption, too. A windfall tax on diesel exports has been set at ₹21.5 per litre, and ₹29.5 per litre for aviation fuel exports. However, don't rush to the pump just yet, though. Retail prices remain unchanged — for now. This comes as the Indian Ministry of Petroleum and Natural Gas insisted that India's petroleum and LPG supply situation is fully secure and under control. However, don't rush to the pump just yet, though. Retail prices remain unchanged — for now.
Why won't consumers benefit?
The answer is sitting in the Persian Gulf. The US-Israel war on Iran and Tehran's blockade of the Strait of Hormuz have sent global crude prices spiralling. That strait, through which somewhere between 20 and 25 million barrels of oil pass every day — roughly a fifth of the world's supply — is effectively closed. Before the conflict, India was sourcing 12 to 15 per cent of its oil through that corridor.
However, the immediate beneficiaries of Friday's cut aren't consumers — not directly, anyway. It's the Oil Marketing Companies, which have been quietly bleeding money on the retail side as crude costs shot up while pump prices held. The duty cut plugs that gap, at least partially.
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FM Sitharaman says move will benefit consumers in the long run
In a post on X, Indian Finance Minister Nirmala Sitharaman said that the excise duty cut would “provide protection to consumers from rise in prices.” She added that Prime Minister Narendra Modi “has always ensured that citizens are protected from vagaries of supply and costs of essential goods.”
The FM also said that ₹21.5 per litre duty has been levied on diesel exports and a ₹29.5 per litre duty on ATF, adding that this will ensure sufficient availability of these products for domestic use.
No need to panic, says the government
The Ministry of Petroleum and Natural Gas has meanwhile pushed back against what it called rumours — there have been scattered reports of panic buying in some areas. "All 1 lakh-plus retail fuel outlets across the country are open and dispensing fuel without interruption," the ministry said, adding that "Not a single outlet has been asked to ration supply. Across the world, countries are dealing with price increases, rationing, odd-even vehicle restrictions, and forced station closures. Few have declared 'National Energy Emergency'. India does not feel for any such measures."
