In an effort to mitigate the effects of rising global oil costs, the Indian government has lowered excise levies on gasoline and diesel by ₹10 per litre each, bringing the rates down to ₹3 per litre for gasoline and nil for diesel.
The action coincides with increased volatility in the world’s energy markets brought on by tensions in West Asia, especially those related to the Strait of Hormuz.
Additionally, the government has granted customs tax relief on imported aviation turbine fuel (ATF) by rescinding a 2022 notification, as well as duty exemptions on fuel exports and deliveries to aircraft travelling abroad.
The levy cut is anticipated to be absorbed by oil marketing companies (OMCs) in order to partially offset growing losses, which are predicted to be around ₹48.8 per litre as a result of high crude prices.
The basics of fuel supply are unchanged despite the world’s uncertainty. With about 60 days of stock cover available against a total reserve capacity of 74 days, the Ministry of Petroleum and Natural Gas has reaffirmed that India’s petroleum and LPG supplies are completely secure.
The administration also affirmed that there is no nationwide scarcity of fuel, gasoline or LPG and that crude procurement for the next two months has been secured.
Global petroleum benchmarks, meanwhile, showed some relaxation, with US WTI falling to $92.08 and Brent prices falling to about $105.53 per barrel, providing a little respite to economies that rely heavily on imports.
As geopolitical concerns continue to disrupt global supply chains, the government’s approach to reconcile consumer price stability with energy security is reflected in the tariff cut and supply assurances.
