Amid a sharp surge in global crude oil prices, Union Petroleum Minister Hardeep Singh Puri said the government has deliberately absorbed financial losses to shield Indian consumers from rising fuel costs.
Global oil prices have jumped dramatically from around $70 per barrel to nearly $122 within a month, triggering steep fuel price increases across several countries. In Europe, prices have risen by nearly 20%, while parts of Africa and Southeast Asia have seen spikes of up to 50%.
Why Didn’t Fuel Prices Rise in India?
He explained that the government chose to protect citizens from global volatility instead of imposing higher fuel prices, even as international markets witnessed extreme fluctuations.
Massive Revenue Hit and Oil Company Losses
To manage the situation, the Centre has taken a significant hit on tax revenues, including cuts in excise duties on fuel.
At the same time, oil marketing companies are reportedly facing heavy losses, estimated at around ₹24 per litre on petrol and ₹30 per litre on diesel, due to the mismatch between global prices and domestic retail rates.
Steps Taken to Control the Situation
Apart from absorbing financial pressure, the government has also introduced export taxes on fuel. This move aims to ensure that domestic supply remains stable and discourages excessive exports by refineries during a global shortage.
These measures are part of a broader strategy to maintain supply stability and avoid sudden price shocks for consumers.
Continuation of Earlier Strategy
Officials highlighted that this approach is consistent with the government’s earlier response during the Russia-Ukraine conflict, when similar steps were taken to protect Indian consumers from global price volatility.
Leadership Backed Decision
Puri credited the leadership of Narendra Modi and Finance Minister Nirmala Sitharaman for taking what he described as a timely and bold decision in the national interest.
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