Govt to continue with steps to keep fuel prices in check
New Delhi, Aug 4
The government will continue to adopt appropriate fiscal and administrative measures to keep fuel prices under control amid the Middle East conflict, which has triggered a surge in prices of oil and gas, the Parliament was informed on Tuesday.
The government had reduced the special additional excise duty on petrol and diesel by Rs 10 per litre earlier this year to protect consumers from the surge in fuel prices, following the Middle East conflict. The reduction in duty led to a revenue loss of around Rs 1.23 lakh crore to the government in the financial year 2026-27.
"The excise duty reduction partly offset the under-recoveries being absorbed by public-sector oil marketing companies (OMCs), enabling them to continue supplying fuel without disruption," Minister of State for Finance Pankaj Chaudhary said in a written reply to a question in the Rajya Sabha.
"The government will continue to adopt appropriate fiscal and administrative measures to mitigate the impact of future fuel price volatility while maintaining fiscal sustainability," he said.
The government's strategy is to accommodate such measures within the available budgetary space by closely monitoring revenue and expenditure trends, reprioritising expenditure, and taking appropriate fiscal measures as warranted by evolving economic conditions, the minister said.
"This enables the government to respond to unforeseen shocks, such as elevated international crude oil prices, while continuing to meet budgetary commitments, support macroeconomic stability, and adhere to the fiscal consolidation path," he added.
The government will continue its efforts to strengthen domestic revenue mobilisation, enhance energy security through diversification of crude oil import sources and expansion of strategic petroleum reserves, promote alternative and cleaner fuels, and improve energy efficiency, which will reduce the economy's vulnerability to external energy shocks while supporting sustainable and resilient economic growth, the minister said.
Meanwhile, the government increased its purchases of Russian crude at discount prices in July, which accounted for over 50 per cent of the country's oil imports during the month. The move is part of the diversification of imports away from the Gulf following the closure of the Strait of Hormuz.
— IANS
Reader Comments
I appreciate the government's effort, but Rs 1.23 lakh crore revenue loss is huge! This will eventually impact other sectors like infrastructure and social welfare. We need a balanced approach, not just temporary fixes.
Buying Russian crude at discount is smart diplomacy! Strait of Hormuz closure would have been disastrous. Proud that India is playing it smart in global markets. 👏
The excise cut helped, but why not also reduce state VAT? Central government did its part; now states should also cooperate to bring down prices further. Petrol is still above Rs 100 in many cities!
Strategic petroleum reserves and clean fuels are the way forward. We can't keep depending on volatile regions forever. Good to see the government is thinking long-term. 🙏
While I support the relief measures, I hope the fiscal deficit targets aren't compromised. Our economy needs stability. Also, let's focus on boosting domestic oil production and renewable energy to reduce import dependence.
Interesting how India is balancing geopolitics and energy security. The Russian discount is pragmatic, but don't underestimate the risks. Hope the government has a Plan B if sanctions tighten. Good analysis
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