Govt takes hit on finances to shield citizens from global oil surge

Union Minister Hardeep Singh Puri praised PM Modi's decision to absorb rising global energy costs, shielding citizens. With crude oil soaring to $122/barrel, the government took a hit on its finances to insulate consumers from price volatility.

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri, on Friday, hailed the Prime Minister's decision to take a hit on the government's own finances again to safeguard the Indian citizen from rising global energy costs. While international crude oil prices surged significantly over the last month, the Centre opted to insulate domestic consumers from the volatility seen in other major economies.

Government Absorbs Shock of International Price Hike

"Hon'ble Prime Minister @narendramodi Ji, in keeping with his Government's commitment of last 4 years since the conflict in Russia-Ukraine started, decided to take a hit on its own finances again to safeguard the Indian citizen. Government has taken a huge hit on it taxation revenues to ensure very high losses of oil companies (approximately 24 Rs/litre for petrol and 30 Rs/litre for diesel) at this time of sky high international prices are reduced," Puri said on X.

The Union Minister highlighted that "international crude prices have gone through the roof in the last 1 month from around 70 dollars/barrel to around 122 dollars/barrel." This sharp upward trend resulted in petrol and diesel price hikes across the globe. According to the Minister, "prices have increased by around 30%-50% in South East Asian countries, 30% in North American countries, 20% in Europe and 50% in African countries."

Puri noted that the Modi government faced two distinct choices in the wake of this international price spike, "either increase prices drastically for citizens of Bharat as all other nations have done or bear the brunt on its finances so that Indian citizen is insulated from international volatility."

To further manage the situation, the government levied an export tax as international prices of petrol and diesel skyrocketed. "At the same time, export tax has been levied as international prices of petrol and diesel have skyrocketed and any refinery exporting to foreign nations will have to pay export tax," he said.

Puri also commended the Union Finance Minister for her timely steps to curb the national oil crisis. "My gratitude to Hon'ble PM Narendra Modi Ji and Hon'ble FM @nsitharaman Ji for this very timely, bold and visionary decision!" he said.

Excise Duty Slashed, Windfall Tax Imposed

The Finance Minister also reiterated the government's swift action on oil price cuts. "In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each. This will provide protection to consumers from rise in prices. Hon. PM @narendramodi has always ensured that citizens are protected from vagaries of supply and costs of essential goods. Further, duties have been imposed on exports of Diesel at ₹21.5 per litre and on ATF at ₹29.5 per litre. This will ensure adequate availability of these products for domestic consumption. The Parliament has been notified about the same," Nirmala Sitharaman said on X.

The government on Friday slashed excise duties for petrol and diesel bringing them down to Rs 3 per litre of petrol and zero for a litre of diesel. Windfall tax on export of diesel has been set at 21.5 rupees/litre. 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.

Gazette Notification on Duty Changes

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." (ANI)

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