Government reduces fuel tax to control rising prices

India’s Union Petroleum Minister Hardeep Singh Puri said the government decided to cut special excise duty on petrol and diesel as global crude oil prices surged sharply due to the ongoing conflict in West Asia. According to him, the government had two options: either raise fuel prices for citizens or absorb the financial burden itself. The Centre chose to protect consumers from sudden price shocks. Puri said this decision reflects the government’s effort to shield Indians from global market volatility.

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Petroleum Minister Hardeep Singh Puri said international crude oil prices surged sharply over the past month, rising from nearly $70 per barrel to around $122 per barrel. This sharp increase pushed fuel prices higher across the world. Several countries in Southeast Asia, North America, Europe and Africa have already raised petrol and diesel prices by 20% to 50%. However, India decided not to pass the full burden of rising crude costs directly to consumers.Puri added that the government is ready to absorb financial pressure to prevent a steep rise in domestic fuel prices. He said oil companies have been suffering heavy losses because of high global crude rates, estimated at about ₹24 per litre for petrol and ₹30 per litre for diesel. By reducing the excise duty, the government aims to ease the financial stress on these companies while keeping petrol and diesel prices relatively stable for consumers.

Government cuts fuel duty to shield consumers from global oil price surge

Prime Minister Narendra Modi prioritized consumer protection during global crises, Petroleum Minister Hardeep Singh Puri said while explaining the decision to cut fuel taxes. He noted that the government had taken a similar step during the Russia–Ukraine conflict and has once again decided to absorb financial pressure. According to him, the latest move highlights the government’s commitment to economic stability and public welfare.The government has also imposed export taxes on certain petroleum products to prevent shortages and maintain adequate domestic supply. Refineries exporting petrol or diesel will now pay additional export duties. Officials believe this step will discourage excessive exports when global prices are extremely high and help ensure fuel availability within the country.

Finance Minister Nirmala Sitharaman confirmed that the Centre has reduced excise duty on petrol and diesel meant for domestic consumption by ₹10 per litre each. She said the decision will protect consumers from a sharp increase in fuel prices caused by global supply disruptions. The move also reflects the government’s focus on keeping essential commodities affordable.

The government has further introduced export duties on diesel and aviation turbine fuel (ATF) to regulate supply. Authorities have fixed the export tax on diesel at ₹21.5 per litre, while ATF will attract a duty of ₹29.5 per litre in certain cases. Officials said these measures aim to ensure sufficient fuel availability in India amid ongoing geopolitical tensions.The finance ministry has reduced the special excise duty on petrol to ₹3 per litre from ₹13, while it has cut the duty on diesel to zero from ₹10, according to an official notification.

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