The Indian government has announced a reduction in taxes on petrol and diesel as the ongoing Middle East conflict continues to disrupt global energy supplies and drive up oil prices.
The move, unveiled on Friday, March 27, is aimed at cushioning the impact of rising fuel costs on consumers.
Announcing the decision, the country’s Finance Minister, Nirmala Sitharaman, said the measure was taken in response to the ongoing crisis in West Asia.
“In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced,” she said in a statement.
India, one of the world’s largest crude oil importers, depends on foreign suppliers for over 85 per cent of its oil needs, with Russia remaining its biggest supplier.
Sitharaman disclosed that taxes on petrol and diesel had been slashed by 10 rupees (about $0.11) per litre.
According to her, the decision is intended “to provide protection to consumers from rise in prices.”
The government also announced new charges on exports of refined products to ensure domestic availability.
Diesel exports will attract a levy of 21.5 rupees ($0.23) per litre, while aviation turbine fuel exports will be charged 29.5 rupees ($0.31) per litre.
“This will ensure adequate availability of these products for domestic consumption,” the minister added.
The surge in oil prices since the outbreak of the Middle East conflict has heightened fears of supply shortages worldwide.
The situation worsened after Iran partially closed the strategic Strait of Hormuz, a key global energy trade route.
India’s Oil Minister, Hardeep Singh Puri, said the government was closely monitoring developments across energy supply chains and essential commodities.
He, however, reassured citizens that the country has sufficient reserves.
According to the oil ministry, India has “nearly two months of steady supply available for every Indian citizen regardless of what happens globally.”
Despite official assurances, reports indicate that panic buying has gripped parts of the country, leading to long queues at filling stations.
Some households have also rushed to purchase electric stove tops, resulting in shortages in stores and online platforms.
The oil ministry has urged citizens to remain calm and disregard false information circulating about fuel shortages.
It warned against “a deliberately mischievous, coordinated campaign of misinformation” aimed at creating unnecessary panic.
