India Cuts Fuel Taxes to Ease Oil Marketing Companies' Burden

The reduction comes amid a global energy crisis due to the US-Israel war on Iran and the consequent Tehran-imposed blockade on the Strait of Hormuz, through which a fifth of the world's crude oil and gas supply, between 20 and 25 million barrels per day, is shipped.

Before the conflict, India bought 12 to 15 per cent of that oil.

According to the Gazette notification. "In exercise of the powers conferred by section 5A of the Central Excise Act, 1944 (1 of 1944) read with section 147 of Finance Act, 2002 (20 of 2002), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 05/2019-Central Excise, dated the 6th July, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(i), vide number G.S.R. 488(E), dated the 6th July, 2019, namely; In the said notification, I. in the Table, (i) against Sl. No. 1, in column (4), for the entry, the entry "Rs. 3 per litre" shall be substituted, (ii) against Sl. No. 2, in column (4), for the entry, the entry "Nil" shall be substituted."

This move brings relief to Oil Marketing Companies oil marketing companies who were losing money on the the marketing side because cost of crude oil shooting up. Retail prices of Petrol and Diesel remain unchanged as of now.

The Central Government also introduced a new Special Additional Excise Duty on Aviation Turbine Fuel, with exemptions reducing the rate to Rs 29.5 per litre. The changes came into effect from March 26.

Earlier, the Government of India said that fuel supply across the country remains stable and retail fuel outlets are operating normally despite the ongoing developments in West Asia, urging the public not to believe rumours or resort to panic buying.

According to a statement released by the Ministry of Petroleum and Natural Gas, "All retail outlets are operating normally across the country", even as there were reports of panic buying in some areas due to rumours.

The ministry clarified that the country has adequate fuel supplies. "There are adequate stocks of petrol and diesel available at all Petrol Pumps in the country," the statement said, reiterating its advice to citizens "not to believe rumours."

The government also said that all refineries are operating at high capacity to ensure an uninterrupted energy supply. "All refineries are operating at high capacity, with adequate crude inventories in place," the ministry said, adding that domestic LPG production from refineries has been increased to support domestic consumption.

- ANI