INDIA SLASHES FUEL TAXES AS GLOBAL CRUDE PRICES SOAR

By Shakir Husain

NEW DELHI, March 27 (Bernama) -- India has slashed fuel taxes on petrol and diesel to cushion domestic prices, as energy companies face mounting import costs amid soaring global crude prices.

Excise duty on petrol has been cut from 13 rupees (RM0.55) to three rupees (RM0.13) per litre, while diesel duty has been reduced to zero from 10 rupees (RM0.42) per litre, according to a Finance Ministry notification.

Petroleum Minister Hardeep Singh Puri said the move would take “a huge hit” on government revenues but help offset “very high losses” faced by oil companies, estimated at around 24 rupees (RM1.02) per litre for petrol and 30 rupees (RM1.27) per litre for diesel.

“At the same time, export tax has been levied as international prices of petrol and diesel have skyrocketed, and any refinery exporting to foreign markets will have to pay the tax,” he said in a post on the social media platform X.

India, the world's third biggest oil consumer, is trying to keep its energy retail market stable amid mounting worries over supplies due to the global energy turmoil created by the United States (US)-Israeli war on Iran.

International crude prices have risen from around US$70 per barrel to around US$122 per barrel in a month, the Indian oil minister said.

The Gulf region's oil and gas sector is reeling from the impact of US and Israeli attacks on Iran as well as Iranian retaliatory actions.

Shipping traffic through the Strait of Hormuz, a critical energy chokepoint along Iran’s southern coast, has declined sharply amid disruptions and restrictions on vessels linked to certain countries.

Despite the volatility, India has sufficient crude oil reserves to meet demand for about 60 days, according to the Petroleum Ministry.

Some places in India have witnessed panic buying of petrol due to shortage rumours, while the government said it is addressing the cooking gas demand by raising liquefied petroleum gas (LPG) output and cracking down on hoarding and illegal trade in gas cylinders.

Domestic consumers are being given preference over commercial users in LPG supplies.

However, the government insists there is no LPG shortage.

"Over and above domestic production, 800 TMT (thousand metric tonnes) of assured inbound LPG cargoes are already secured and en route from the US, Russia, Australia, and other countries," the Petroleum Ministry said on Thursday.

-- BERNAMA