New Delhi: The government of India has reduced taxes on petrol and diesel as global oil prices continue to rise due to tensions in the Middle East. The move is aimed at protecting consumers and easing pressure on the economy.
Officials announced that the special additional excise duty on petrol has been reduced from 13 rupees per litre to 3 rupees. The duty on diesel has been fully removed, down from 10 rupees per litre. This results in a reduction of about 10 rupees per litre for both fuels.
The decision comes at a time when global crude oil prices have crossed 100 dollars per barrel. Supply concerns have increased due to instability around the Strait of Hormuz, a key route for oil shipments that is crucial for India’s imports.
The tax cut is expected to help control inflation, as fuel prices affect transport costs and the prices of essential goods. However, there is no clear indication yet that petrol and diesel prices will immediately fall at fuel stations. Oil marketing companies are currently facing heavy losses and may use the tax relief to manage their costs.
To balance the loss of revenue, the government has increased taxes on fuel exports. Higher duties have been placed on diesel and aviation fuel exports to ensure more fuel remains available within the country.
The move is also significant as it comes ahead of important political developments, where fuel prices often become a key concern for the public.
While the tax cuts are expected to support consumers and oil companies, they will also reduce government income. This has raised concerns about the fiscal impact, as the country may lose a large amount of revenue over the year.
Overall, the decision reflects how global conflicts and rising oil prices are influencing domestic economic policies in India.