Govt Absorbing Burden of Oil Price Rise to Shield Consumers: Hardeep Puri

Overview

Union Petroleum and Natural Gas Minister Hardeep Singh Puri has said the government is absorbing the sharp rise in global crude oil prices to shield Indian consumers from steep fuel price increases, even as international crude rates soar amid geopolitical tensions. :contentReference[oaicite:0]{index=0}

Surging Global Crude Prices

Crude oil prices have jumped significantly in recent weeks, rising from around $70 per barrel to about $122 per barrel, driven largely by tensions in West Asia including disruptions around the Straight of Hormuz. This has triggered substantial increases in fuel prices worldwide. :contentReference[oaicite:1]{index=1}

Policy Choices: Shielding Citizens

Puri highlighted that India faced two clear policy choices: either pass the full impact of global price hikes on to Indian consumers or absorb part of it through fiscal measures. The government, under Prime Minister Narendra Modi, has opted to shoulder much of the burden to protect households. :contentReference[oaicite:2]{index=2}

To cushion the blow, the central government has cut excise duties on petrol and diesel by ₹10 per litre each. This includes reducing the special excise duty on petrol and diesel for domestic consumption, a move designed to moderate retail prices even as global markets remain volatile. :contentReference[oaicite:3]{index=3}

Revenue Loss and Protective Measures

Puri explained that absorbing the price shock has a fiscal cost. With fuel companies currently incurring losses estimated at roughly ₹24 per litre on petrol and about ₹30 per litre on diesel at current global rates, the government is forgoing significant tax revenue to prevent sharp increases at the pump. :contentReference[oaicite:4]{index=4}

To ensure adequate domestic supply and discourage excessive exports amid higher international prices, export levies on diesel and aviation turbine fuel (ATF) have also been introduced. :contentReference[oaicite:5]{index=5}

Impact on Consumers and Markets

While fuel prices in India are deregulated and companies set retail rates, the combination of excise cuts and market interventions is meant to shield consumers from wholesale global price shocks. Authorities have dismissed reports of fuel shortages, noting that supply remains stable with sufficient buffer stocks. :contentReference[oaicite:6]{index=6}

Conclusion

The government’s fiscal measures—reducing taxes and absorbing significant losses—reflect a strategic effort to cushion Indian consumers from the global crude price surge. While this approach impacts government revenues, it aims to prevent sudden retail price spikes and maintain economic stability amid ongoing global energy market volatility. :contentReference[oaicite:7]{index=7}