The government stated on Tuesday that it is keeping a close eye on emerging geopolitical circumstances and will make “measured interventions” to keep fuel costs under control in the common man’s benefit. The Wholesale Price Index (WPI) subgroup comprising crude petroleum and natural gas, fuel & power, according to Minister of State for Finance Pankaj Chaudhary, is closely tied to crude oil price changes.
In response to a question in the Rajya Sabha about whether the government will reduce excise duty to keep fuel price escalation due to the Ukrainian crisis under control, Chaudhary said the public sector oil marketing companies (OMCs) make appropriate pricing decisions for petrol and diesel based on their international product prices, exchange rate, tax structure, inland freight, and other cost elements, among other factors.
“The government is keeping a close eye on these issues, as well as emerging geopolitical circumstances, and will make calibrated interventions as and when necessary to protect the interests of the ordinary man,” he said.
India buys nearly 85% of its oil from other countries, making it one of the most vulnerable countries in Asia to rising oil costs. Crude oil prices hit USD 140 a barrel early last week, despite the ongoing Russia-Ukraine conflict. Since then, prices have levelled out and are now hanging around USD 102 per barrel.
The minister stated that, with effect from November 4, 2021, the central excise duty on petrol and diesel was reduced by Rs 5 per litre and Rs 10 per litre, respectively, to keep fuel inflation under control.