Petrol and diesel prices will be reviewed every fortnight as part of a calibrated and closely monitored response to the ongoing West Asia conflict that has sharply pushed up global crude oil prices, Vivek Chaturvedi, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), said on Friday.
Speaking at an inter-ministerial briefing, Chaturvedi said international crude prices have risen significantly due to the Middle East war, adding that the government’s response has been “very calibrated”.
“The situation is dynamic, it is not business as usual that you’ll have predictability. We are living in difficult times,” he said, pointing to disruptions in global shipping routes and supply chains.
He added, "the total revenue foregone on petrol and diesel duty slash is Rs 7,000 cr in a fortnight."
Also Read: Retail petrol, diesel prices won't change after Rs 10/litre tax cut, government says
He added that the government will assess the evolving situation on a fortnightly basis, including trends in imports and domestic consumption, before taking any further decisions. “Even within a limited time frame of a fortnight, the department will have to factor in the amount of imported goods,” he said.
As part of domestic measures, the revised excise duty on petrol has been cut from Rs 21.90 per litre to Rs 11.90 per litre. The revenue implication of the recent proposals is estimated at around Rs 1,500 crore over a two-week period, based on back-of-the-envelope calculations, Chaturvedi said, adding that the exact impact will be assessed by the department.
The comments come hours after the government announced a Rs 10 per litre cut in excise duty on petrol and diesel, a move aimed at cushioning public sector oil marketing companies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation from mounting under-recoveries amid soaring global crude prices. The reduction, however, will not be passed on to consumers, keeping retail pump prices unchanged.
Officials also flagged the impact of the conflict on energy supply chains. “Stocks of crude, LPG and LNG are being affected because of the war,” Chaturvedi said.
At the same time, the government sought to reassure on domestic availability and supply prioritisation. Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas said India has sufficient crude inventories, while domestic LPG production has increased by nearly 40%.
She also outlined how the government calibrated supply decisions to prioritise domestic consumers. “The Indian government decided to prioritise domestic consumers, and hence stopped the commercial supply. Then, taking calibrated decisions, we resumed 20% supply, then 10% based on ease of doing business, then 50%, and today we have made it 70%,” she said.
Also Read: India slashes special additional excise duty on petrol, diesel by Rs 10 per litre
Highlighting supply to industry, the oil ministry said that from March 14 to March 26, around 30,000 tonnes of commercial LPG has been supplied to consumers. They added that priority has been given to key sectors such as steel, automobiles and plastics.
“We have sufficient supplies of petrol, diesel, crude and LPG. Do not believe in rumours,” said C. Senthil Rajan, Joint Secretary, Ministry of Information and Broadcasting, adding that there has been no congestion at major ports and supply chains remain stable.
He said that there is no shortage of fuel in the country despite panic in some quarters. “We have sufficient supplies of petrol, diesel, crude and LPG. Do not believe in rumours,” he said, adding that no congestion has been reported at major ports and supply chains remain intact. “In the last few days, there has been panic over petrol and diesel, whereas there is no shortage. Supplies are in place. There is no need to panic.”
On LPG supplies, officials said around 30,000 tonnes of commercial LPG has been supplied to consumers between March 14 and March 26, while about 30,000 cylinders have been provided to migrant labourers. “Priority has been given to steel, auto, plastics and other key industries,” Rajan said.
Highlighting domestic preparedness, Sujata Sharma said, “We have sufficient amount of crude. LNG and LPG supply is ensured,” adding that more than 10,000 PNG connections are being provided daily.
She also noted that despite India’s crude basket rising from around $70 to over $100 per barrel, retail fuel prices have not been increased. “The Indian government decided to take the hit and ensure petrol and diesel prices are not raised. Since April 2022, prices have either decreased or remained the same,” she said.
On the external front, the government said that India is closely monitoring developments in the Gulf and West Asia region. “We are according high priority to the welfare of Indian students in Gulf countries and ensuring that their academic year is not affected,” he said, adding that advisories have been issued and exams rescheduled where necessary. Aseem Mahajan, Joint Secretary, MEA, noted that the Kerala board has postponed exams and will review the situation in April, while the National Testing Agency has issued an advisory for JEE-Mains candidates registered from Gulf countries.
Mahajan added that connectivity is being maintained, with around 80 flights expected to operate from the UAE, while Qatar has partially reopened its airspace and Qatar Airways is likely to operate around 10 flights to India. He also confirmed that an Indian national lost their life in Abu Dhabi.
He also noted that diplomatic engagements are ongoing, with External Affairs Minister S. Jaishankar currently in France for the G7 Foreign Ministers’ meeting, where issues of energy security, fertiliser supply and Global South concerns were raised.
The government also clarified that no decision of lockdown is being considered.
Speaking at an inter-ministerial briefing, Chaturvedi said international crude prices have risen significantly due to the Middle East war, adding that the government’s response has been “very calibrated”.
“The situation is dynamic, it is not business as usual that you’ll have predictability. We are living in difficult times,” he said, pointing to disruptions in global shipping routes and supply chains.
He added, "the total revenue foregone on petrol and diesel duty slash is Rs 7,000 cr in a fortnight."
Also Read: Retail petrol, diesel prices won't change after Rs 10/litre tax cut, government says
He added that the government will assess the evolving situation on a fortnightly basis, including trends in imports and domestic consumption, before taking any further decisions. “Even within a limited time frame of a fortnight, the department will have to factor in the amount of imported goods,” he said.
As part of domestic measures, the revised excise duty on petrol has been cut from Rs 21.90 per litre to Rs 11.90 per litre. The revenue implication of the recent proposals is estimated at around Rs 1,500 crore over a two-week period, based on back-of-the-envelope calculations, Chaturvedi said, adding that the exact impact will be assessed by the department.
The comments come hours after the government announced a Rs 10 per litre cut in excise duty on petrol and diesel, a move aimed at cushioning public sector oil marketing companies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation from mounting under-recoveries amid soaring global crude prices. The reduction, however, will not be passed on to consumers, keeping retail pump prices unchanged.
Officials also flagged the impact of the conflict on energy supply chains. “Stocks of crude, LPG and LNG are being affected because of the war,” Chaturvedi said.
At the same time, the government sought to reassure on domestic availability and supply prioritisation. Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas said India has sufficient crude inventories, while domestic LPG production has increased by nearly 40%.
She also outlined how the government calibrated supply decisions to prioritise domestic consumers. “The Indian government decided to prioritise domestic consumers, and hence stopped the commercial supply. Then, taking calibrated decisions, we resumed 20% supply, then 10% based on ease of doing business, then 50%, and today we have made it 70%,” she said.
Also Read: India slashes special additional excise duty on petrol, diesel by Rs 10 per litre
Highlighting supply to industry, the oil ministry said that from March 14 to March 26, around 30,000 tonnes of commercial LPG has been supplied to consumers. They added that priority has been given to key sectors such as steel, automobiles and plastics.
“We have sufficient supplies of petrol, diesel, crude and LPG. Do not believe in rumours,” said C. Senthil Rajan, Joint Secretary, Ministry of Information and Broadcasting, adding that there has been no congestion at major ports and supply chains remain stable.
He said that there is no shortage of fuel in the country despite panic in some quarters. “We have sufficient supplies of petrol, diesel, crude and LPG. Do not believe in rumours,” he said, adding that no congestion has been reported at major ports and supply chains remain intact. “In the last few days, there has been panic over petrol and diesel, whereas there is no shortage. Supplies are in place. There is no need to panic.”
On LPG supplies, officials said around 30,000 tonnes of commercial LPG has been supplied to consumers between March 14 and March 26, while about 30,000 cylinders have been provided to migrant labourers. “Priority has been given to steel, auto, plastics and other key industries,” Rajan said.
Highlighting domestic preparedness, Sujata Sharma said, “We have sufficient amount of crude. LNG and LPG supply is ensured,” adding that more than 10,000 PNG connections are being provided daily.
She also noted that despite India’s crude basket rising from around $70 to over $100 per barrel, retail fuel prices have not been increased. “The Indian government decided to take the hit and ensure petrol and diesel prices are not raised. Since April 2022, prices have either decreased or remained the same,” she said.
On the external front, the government said that India is closely monitoring developments in the Gulf and West Asia region. “We are according high priority to the welfare of Indian students in Gulf countries and ensuring that their academic year is not affected,” he said, adding that advisories have been issued and exams rescheduled where necessary. Aseem Mahajan, Joint Secretary, MEA, noted that the Kerala board has postponed exams and will review the situation in April, while the National Testing Agency has issued an advisory for JEE-Mains candidates registered from Gulf countries.
Mahajan added that connectivity is being maintained, with around 80 flights expected to operate from the UAE, while Qatar has partially reopened its airspace and Qatar Airways is likely to operate around 10 flights to India. He also confirmed that an Indian national lost their life in Abu Dhabi.
He also noted that diplomatic engagements are ongoing, with External Affairs Minister S. Jaishankar currently in France for the G7 Foreign Ministers’ meeting, where issues of energy security, fertiliser supply and Global South concerns were raised.
The government also clarified that no decision of lockdown is being considered.
