West Asia Crisis Fuels Fuel Price Hikes, Govt Foregoes Revenue
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Union Finance Minister Nirmala Sitharaman linked the West Asia crisis to rising fuel prices in India, stating the government is sacrificing Rs 1 lakh crore in revenue due to excise duty cuts to protect citizens and businesses.
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Fuel prices in India have seen multiple hikes in a short period, attributed to the ongoing crisis in West Asia which is impacting global crude oil costs. The government has previously cut excise duties to cushion consumers.
Fuel prices have risen again. Union Finance Minister Nirmala Sitharaman highlighted the West Asia crisis impact. She stated this crisis means higher fuel costs for citizens. The government is foregoing Rs 1 lakh crore in revenue. This is due to excise duty cuts on petrol and diesel. The government aims to protect citizens and businesses.
Mumbai: Hours after the fourth hike in pump prices for petrol and diesel in 11 days, Union Finance Minister Nirmala Sitharaman on Monday said that the crisis in West Asia is not just a geopolitical issue, but it will lead to higher fuel costs for the common people.
Speaking at the 27th foundation day event of Sidbi here, she said the government is sacrificing Rs 1 lakh crore of revenue by cutting the excise duties on diesel and petrol.
"The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital and uncertainty in export orders," the finance minister said.
Read More: The three Fs that Sitharaman flagged as India braces for a widening global oil shock, forex strain
Petrol prices were raised by Rs 2.61 a litre and diesel by Rs 2.71 on Monday, marking the fourth increase in less than two weeks that extended a delayed pass-through of soaring global crude oil costs triggered by the West Asia conflict.
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The latest increase brought cumulative hikes since May 15 to nearly Rs 7.50 per litre.
She acknowledged that it is a challenge for the small business units to plan for the future, and also added that the crisis, which has been running for over 80 days now is also a challenge for countries, including India.
The government's approach is focused on protecting citizens, supporting micro, small and medium enterprises, safeguard exporters and keeping supply chains moving and maintaining economic stability, she said.
Read More: Assam CM Himanta Biswa Sarma meets Nirmala Sitharaman, discusses state’s growth roadmap
The minister said the government has taken a series of steps to protect exporters, including the simplifiation of customs formalities, which ensured that enterprises were able to bring back cargo, reroute them or store and trans-ship the stranded cargo.
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Continued fuel price increases if the West Asia crisis persists.
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Further government intervention to manage fuel prices or support affected sectors.
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Açık Sorular
- What further measures will the government take if fuel prices continue to rise?
- How long is the West Asia crisis expected to impact global oil prices?
- What is the projected impact on India's inflation and economic growth?
- Will further excise duty cuts be considered?
