The government on Tuesday said it is keeping a close watch on evolving geopolitical developments and would make ‘calibrated interventions’ to keep fuel prices under control “to safeguard the interest of the common man.”
Minister of State for Finance Pankaj Chaudhary said crude petroleum and natural gas, fuel & power subgroup in the Wholesale Price Index (WPI) is directly related to the fluctuations in crude oil prices.
To a question in the Rajya Sabha on whether the government will cut excise duty to keep fuel price escalation due to the Ukrainian crisis in control, Mr Chaudhary said the public sector oil marketing companies (OMCs) take appropriate decisions on pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements etc.
“Government is keeping a close watch on these factors and the evolving geopolitical developments and would make calibrated interventions as and when required to safeguard the interests of the common man,” he said.
India relies on overseas purchases to meet about 85 per cent of its oil requirement, making it one of the most vulnerable in Asia to higher oil prices.
Amid the ongoing Russia-Ukraine war, crude oil prices had touched $140 a barrel early last week. Since then, the prices have cooled and are now hovering around $102 a barrel.
Giving details of measures taken to keep fuel inflation under control, the minister said central excise duty on petrol and diesel was cut by Rs 5 per litre and Rs 10 per litre, respectively, with effect from November 4, 2021.
Many states governments have also reduced Value Added Tax on petrol and diesel.
“Consequently, retail prices of petrol and diesel sobered down across the country. To safeguard the interests of the common man, retail prices of diesel and petrol have not been revised since November 2021, despite the increase in global crude oil prices,” Mr Chaudhary said.