India Cuts Excise Duty On Petrol, Diesel
India has cut special additional excise duties on petrol and diesel as the government moves to cushion fuel markets from the shock caused by the Iran war and the disruption around the Strait of Hormuz. The decision comes as oil and gas supplies remain under pressure and concerns over import costs continue to grow.
India Cuts Excise Duty On Petrol And Diesel
According to the government order, the special excise duty on petrol has been reduced to Rs 3 per litre from Rs 13 per litre. The duty on diesel has been cut to zero from Rs 10 per litre. The move is aimed at easing some of the pressure created by volatile global fuel prices.
Fuel Tax Cut Comes Amid Iran War Pressure
The tax reduction comes at a time when the conflict involving Iran has sharply increased uncertainty in global energy markets. The Strait of Hormuz remains a critical route for crude shipments, and any disruption there directly affects major importers such as India. With the country heavily dependent on overseas oil, even short-term instability can have a significant impact on fuel costs and inflation risks.
Government Balances Supply Risks And Fiscal Cost
India imports more than 90 percent of its oil needs, making it especially vulnerable to external supply shocks. The duty cut is expected to reduce part of the burden on fuel retailers, though it will also carry a fiscal cost for the government. At the same time, New Delhi has maintained that adequate arrangements are in place for key sectors, including fertilisers and power, as it tries to manage the wider economic impact of the crisis.
