India Shields Consumers from Oil Price Shock
Excise Cut, Export Curbs Secure Fuel Supply
Duty Cut Cushions OMCs Amid Crude Surge
New Delhi: The Government of India today reduced excise duty by ₹10 per litre on petrol and diesel with immediate effect, as part of calibrated measures to shield consumers and public sector oil marketing companies (OMCs) from a sharp surge in global crude oil prices, while keeping retail pump prices unchanged.
The decision follows a steep rise in international crude prices from about USD 70 per barrel to nearly USD 122 per barrel in under a month—an increase of around 75 per cent—amid the ongoing conflict in West Asia, supply chain disruptions and heightened uncertainty, including concerns linked to the Strait of Hormuz. Officials said international prices of petrol, diesel and aviation turbine fuel (ATF) have also risen sharply during this period, creating pressure on domestic supply and pricing.
The excise reduction will not be passed on as a price cut at the pump but will instead offset losses incurred by state-run OMCs—Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL)—which continue to supply fuel below cost. At current global prices, under-recoveries are estimated at about ₹26 per litre on petrol and ₹81.90 per litre on diesel, with combined daily losses of around ₹2,400 crore. The duty cut reduces these losses by ₹10 per litre, helping sustain supply without increasing retail prices.
Petroleum and Natural Gas Minister Hardeep Singh Puri said the government had chosen to absorb the fiscal burden rather than pass it on to consumers. “The Government had two choices: either increase prices drastically for citizens of Bharat as all other nations have done, or bear the brunt on its finances so that the Indian citizen is insulated from international volatility,” he said. “Honourable Prime Minister Shri Narendra Modi Ji decided to take a hit on Government finances to safeguard the Indian citizen.”
Officials said the approach is consistent with the policy adopted during the 2022 Russia–Ukraine conflict, when central taxes were cut, and OMCs absorbed sustained losses to protect households and businesses from global price volatility. They noted that fuel prices have risen by 30 to 50 per cent across South and South-East Asia, about 30 per cent in North America and 20 per cent in Europe during the current crisis, while India has maintained price stability at a fiscal cost.
At the inter-ministerial briefing, senior officers of the Central Board of Indirect Taxes and Customs (CBIC) said export duties have been imposed in the form of Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) to prioritise domestic availability of fuels. Export duty on diesel has been set at ₹21.50 per litre and on ATF at ₹29.50 per litre, while petrol exports currently attract no duty due to prevailing crack margins. These rates will be reviewed on a fortnightly basis. Officials said the prevailing market conditions had created incentives for refiners to export petroleum products at higher international prices, necessitating calibrated intervention to ensure domestic availability of both diesel and ATF.
Domestic refiners have also been directed to supply 50 per cent of exported petrol and 30 per cent of exported diesel to the domestic market, reinforcing the focus on energy security amid global uncertainty.
Officials said all refineries are operating at high capacity with adequate crude inventories, maintaining sufficient stocks of petrol and diesel. Retail outlets across the country are functioning normally, though panic buying was reported in some areas following rumours. The government reiterated that there is no shortage of fuel and advised citizens not to engage in panic purchases, warning that attempts are being made in certain quarters to spread misinformation and create unnecessary panic.
Dismissing speculation about a possible lockdown, officials said supply chains remain fully operational and adequate stocks of petrol and diesel are available nationwide, urging citizens to rely only on official sources.
In the natural gas sector, priority allocation continues with 100 per cent supply to domestic piped natural gas (PNG) and compressed natural gas (CNG) transport, while supply to industrial and commercial consumers is being maintained at around 80 per cent of average consumption. City Gas Distribution (CGD) entities—including Indraprastha Gas Limited (IGL), Mahanagar Gas Limited (MGL), GAIL Gas Limited and Bharat Petroleum Corporation Limited (BPCL)—have been directed to prioritise PNG connections for key establishments such as restaurants, hotels, hostels and community kitchens, and are offering incentives to accelerate adoption. They reported issuing 10,568 new or gas-in PNG connections across 110 geographical areas in a single day.
The government has introduced regulatory measures to accelerate PNG expansion, including notification of the Natural Gas and Petroleum Products Distribution Order, 2026, a time-bound framework for pipeline expansion and last-mile connectivity. The Petroleum and Explosives Safety Organisation (PESO) has been directed to clear CGD applications within 10 days, while the Ministry of Road Transport and Highways (MoRTH) has implemented a three-month fast-track approval mechanism. States and Union Territories (UTs) have been urged to expedite Right of Way approvals and nominate nodal officers for coordination.
To ease pressure on liquefied petroleum gas (LPG) demand, commercial LPG allocation has been increased in stages—from partial restoration of 20 per cent, followed by an additional 10 per cent linked to PNG reforms, and subsequent increases of 20 per cent each on March 21 and March 27—taking total allocation to 70 per cent of pre-crisis levels. Priority is being accorded to sectors such as steel, automobile, textile, dye, chemicals and plastics, particularly industries requiring specialised heating where substitution is not feasible. Domestic LPG supplies continue without disruption, with no dry-outs reported at distributorships. More than 40,000 small 5-kg free trade LPG (FTL) cylinders were sold on the previous day, and about 29,656 metric tonnes (MT) of commercial LPG have been uplifted since March 14.
An additional allocation of 48,000 kilolitres (KL) of Superior Kerosene Oil (SKO) has been made to states and UTs, which have been asked to identify district-level distribution points.
Enforcement drives have intensified under the Essential Commodities Act, 1955 and the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, 2000. More than 3,000 raids have been conducted, and over 1,500 LPG cylinders seized, while public sector OMCs have carried out more than 1,500 surprise inspections and issued over 350 show-cause notices to distributors. States have been asked to conduct daily press briefings, establish control rooms and helplines, monitor misinformation on social media and take action against hoarding and black marketing.
In the maritime sector, operations remain stable despite tensions in the Persian Gulf, with no congestion reported across ports as confirmed by State Maritime Boards including Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh and Puducherry. Around 20 Indian-flagged vessels with about 540 seafarers remain in the western Persian Gulf, with no incidents reported in the past 24 hours. The Directorate General of Shipping (DG Shipping) control room, operating round the clock, has handled 4,326 calls and 8,556 emails since activation, including 98 calls and 335 emails in the past 24 hours and 218 calls and 647 emails over the last 48 hours, and has facilitated the repatriation of more than 699 seafarers.
The Ministry of External Affairs (MEA) said it is closely monitoring developments in West Asia, with the safety of Indian nationals remaining the highest priority. The External Affairs Minister, currently in France for the G7 Foreign Ministers’ Meeting on March 26–27, held discussions with counterparts from France, Canada, South Korea, Japan, Brazil, the United Kingdom and Germany, and addressed sessions on global governance reforms. During the discussions, he highlighted concerns of the Global South, particularly in relation to energy, fertiliser supplies and food security, and underscored the need for resilient supply chains.
Indian missions across the region are operating 24×7 helplines and assisting nationals with travel, visas and logistics, while coordinating with authorities and education boards, including the Central Board of Secondary Education (CBSE), the Indian Certificate of Secondary Education (ICSE) and the Kerala Board to minimise academic disruption. Since February 28, around 4.75 lakh passengers have returned to India. Flight operations continue under constraints, with about 80 flights expected from the United Arab Emirates (UAE), limited services from Saudi Arabia and Oman, around 10 flights by Qatar Airways following partial reopening of Qatari airspace, and alternate routing via countries such as Jordan, Armenia, Azerbaijan and Saudi Arabia due to closures in Kuwait and Bahrain.
The government said seven Indian nationals have lost their lives in various incidents in the region, and one remains missing. One Indian national was killed in an attack in Abu Dhabi, while another sustained minor injuries and has been discharged. Efforts are ongoing to assist affected families and repatriate mortal remains.
The government reiterated that there is no shortage of petrol, diesel or LPG in the country and urged citizens to avoid panic buying, rely on official sources and conserve energy. Consumers have been advised to use digital modes for LPG booking, avoid unnecessary visits to distributors and consider alternative fuels such as PNG and electric cooking options.
Officials said the situation is being closely monitored and all measures, including tax rates and supply interventions, will be reviewed on a fortnightly basis to ensure energy security, supply stability and protection of consumers amid evolving global conditions.
– global bihari bureau
