India on Friday moved to protect its fuel supply and consumers by reducing domestic taxes on gasoline and diesel and imposing a levy on fuel exports.
In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by 10 rupees ($0.11) per liter each, Finance Minister Nirmala Sitharaman said in a post on X today.
“This will provide protection to consumers from rise in prices,” the minister added.
In addition, India also imposes duties on exports of diesel and jet fuel, at 21.50, or $0.23, per liter for diesel, and 29.50, or $0.31 per liter of aviation fuel, which “will ensure adequate availability of these products for domestic consumption,” Sitharaman said.
Amid the worst supply crisis in the history of the oil market, India, the world’s third-largest crude importer, was among the first to feel the crunch as it depends on the Middle East for about half of its crude imports. The Strait of Hormuz is also where 90% of India’s imports of liquefied petroleum gas (LPG), the primary cooking fuel in the country, transited before the war.
LPG supply shortages have resulted in a slump in consumption in March, and the government has cut LPG supplies to commercial establishments and industries to have more cooking gas available for household use.
Now the federal government looks to tackle the fuel crisis amid soaring international crude oil prices
The government has decided to take a hit on its finances and protect consumers, Oil Minister Hardeep Singh Puri said.
The federal government has taken a huge hit on its taxation revenues to ensure that the very high losses of oil companies at this time of sky-high international prices are reduced, the minister added.
“At the same time, export tax has been levied as international prices of petrol and diesel have skyrocketed and any refinery exporting to foreign nations will have to pay export tax,” Puri noted.
By Tsvetana Paraskova for Oilprice.com
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