Union Finance Minister Nirmala Sitharaman on Friday welcomed the cut in excise duty on petrol and diesel announced by the government.
The Finance Minister said that the main objective of this move was to protect consumers from rising crude oil prices due to the ongoing conflict in West Asia.
He said, “First of all, whenever such a crisis occurs in the world and it impacts India, be it the Covid crisis before or now, the immediate reaction of the Honorable Prime Minister is to ensure that the burden does not fall on the public and they do not have to face shortage or trouble of petrol, diesel and LPG.”
Nirmala Sitharaman further said, “For this reason, now the prices of crude oil are increasing in the international market, and as a result the prices of petrol, diesel and ATF (aviation turbine fuel) are also increasing, so the Honorable Prime Minister wants that the consumer price should not increase. That is why we have decided to support the Oil Marketing Companies (OMCs) so that the government can help them in purchasing the commodities which they are purchasing at higher prices, but the rates for the public should not be increased.”
He further said, “Yesterday, on the day of Ram Navami, the Honorable Prime Minister called an emergency meeting and discussed these topics and took a decision immediately. And whatever work had to be done, our ministry and the petroleum ministry together did that work last night, and today we are announcing this decision.”
The Finance Minister said that another objective of the excise duty cut is to save the oil marketing companies, which are facing problems due to rising crude oil prices. He said that there will be no reduction in fuel supply due to this.
The Finance Minister said, “Prices abroad are rising due to which oil marketing companies may stop purchases – such a situation should not happen. They should continue purchasing, import oil and make arrangements to ensure that our public gets the right quantity at the right time. That is why, because of today’s decision, there will be no shortage in supply, there will be no shortage in availability and the public will get diesel, petrol and crude oil.”
The Finance Minister said that the rate of excise duty on export of aviation turbine fuel has been increased to ensure that use of this fuel is given priority in the domestic sector.
He further said, “ATF is very important. It is essential for India’s aircraft and our companies to get ATF. For that reason, there are many refineries in India that buy goods from abroad, refine them here, and then export them abroad and give them to us.”
But now we have increased the rate on that export, increased the excise duty, so that instead of exporting they sell it in India itself, which will ensure adequate availability in India and people will not feel shortage,” he said.
The government on Friday drastically cut excise duty on petrol and diesel, bringing excise duty on petrol down to Rs 3 per liter and on diesel to zero per litre.
Windfall tax on export of diesel has been set at Rs 21.5 per litre.
The cuts come amid a global energy crisis caused by the war between the US and Israel over Iran and the resulting blockade imposed by Tehran on the Strait of Hormuz.
One-fifth of the world’s crude oil and gas supply, or 20 to 25 million barrels per day, is transported through the Strait of Hormuz. Before the war, India bought 12 to 15 percent of that oil.
