Government Forms Inter-Ministerial Group to Address Middle East Crisis

Formation of Inter-Ministerial Group

The government has established an inter-ministerial group led by Defence Minister Rajnath Singh to monitor issues arising from the conflict in the Middle East. According to sources, this group includes key ministers such as Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, and Petroleum Minister Hardeep Singh Puri.

Tax Cuts on Fuel Amid Rising Oil Prices

In response to the ongoing war in West Asia, the government has reduced the excise duty on petrol by three rupees per liter and eliminated it entirely on diesel to shield consumers from the surge in global crude oil prices. A notification issued late on March 26 by the Finance Ministry confirmed that the excise duty on petrol has been slashed from 13 rupees to three rupees per liter, while the duty on diesel has been cut from ten rupees to zero. This reduction is effective immediately.

Impact on Oil Companies

Despite the rise in international prices, retail pump rates have remained unchanged, putting financial pressure on oil companies. To alleviate this burden, the government has implemented the excise duty cuts. Following this announcement, shares of fuel retailers such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation opened higher on the Bombay Stock Exchange. Rating agency ICRA noted that if crude oil prices average between 100 to 105 dollars per barrel, fuel retailers could incur losses of 11 rupees per liter on petrol and 14 rupees per liter on diesel. ICRA also suggested that the government might reduce excise duties to maintain stable retail prices. India imports approximately 88% of its crude oil needs and about half of its natural gas requirements.