India Reduces Excise Duties on Fuel Amid Global Energy Crisis
Government Cuts Excise Duties on Petrol and Diesel
The Indian government has announced a reduction in special additional excise duties on petrol and diesel, lowering the rates to ₹3 ($0.0318) per litre for petrol and eliminating the duty on diesel, as per a government order issued on Thursday. This decision comes in response to the ongoing global energy crisis, exacerbated by the conflict involving the US, Israel, and Iran, along with Iran's blockade of the Strait of Hormuz, a crucial passage for a significant portion of the world's crude oil and gas. Fortunately, Iran has permitted Indian vessels to navigate through the Strait.
The excise duty on petrol has been slashed from ₹13 per litre to ₹3, representing a ₹10 reduction. Diesel's excise duty has been completely removed, down from ₹10 per litre. The government reassured that India has approximately 60 days' worth of oil reserves, emphasizing that there is no shortage of petrol, diesel, or LPG. Reports suggesting shortages have been labeled as a "deliberate misinformation campaign" intended to incite panic buying.
According to the ministry, all petrol stations nationwide are sufficiently stocked and functioning normally, with no rationing of fuel. Some smaller town petrol stations have faced challenges in acquiring fuel due to cash-and-carry policies from oil companies. In response, the ministry has increased credit terms for these stations from one day to over three days to prevent any fuel shortages caused by financial constraints.
The ministry urged citizens to avoid being misled by a coordinated misinformation effort aimed at creating unnecessary panic. Additionally, major oil companies such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) have confirmed that their petrol stations are operating without any fuel shortages. As the fourth-largest refiner and fifth-largest exporter of petroleum products globally, India has assured the availability of domestic fuel and continues to supply refined products to over 150 nations.