Govt to continue with steps to keep fuel prices in check

New Delhi, Aug 4 (IANS) The government will continue to adopt appropriate fiscal and administrative measures to keep fuel prices under control amid the Middle East conflict, which has triggered a surge in prices of oil and gas, the Parliament was informed on Tuesday.

The government had reduced the special additional excise duty on petrol and diesel by Rs 10 per litre earlier this year to protect consumers from the surge in fuel prices, following the Middle East conflict. The reduction in duty led to a revenue loss of around Rs 1.23 lakh crore to the government in the financial year 2026-27.

“The excise duty reduction partly offset the under-recoveries being absorbed by public-sector oil marketing companies (OMCs), enabling them to continue supplying fuel without disruption,” Minister of State for Finance Pankaj Chaudhary said in a written reply to a question in the Rajya Sabha.

“The government will continue to adopt appropriate fiscal and administrative measures to mitigate the impact of future fuel price volatility while maintaining fiscal sustainability,” he said.

The government’s strategy is to accommodate such measures within the available budgetary space by closely monitoring revenue and expenditure trends, reprioritising expenditure, and taking appropriate fiscal measures as warranted by evolving economic conditions, the minister said.

“This enables the government to respond to unforeseen shocks, such as elevated international crude oil prices, while continuing to meet budgetary commitments, support macroeconomic stability, and adhere to the fiscal consolidation path,” he added.

The government will continue its efforts to strengthen domestic revenue mobilisation, enhance energy security through diversification of crude oil import sources and expansion of strategic petroleum reserves, promote alternative and cleaner fuels, and improve energy efficiency, which will reduce the economy’s vulnerability to external energy shocks while supporting sustainable and resilient economic growth, the minister said.

Meanwhile, the government increased its purchases of Russian crude at discount prices in July, which accounted for over 50 per cent of the country’s oil imports during the month. The move is part of the diversification of imports away from the Gulf following the closure of the Strait of Hormuz.

–IANS

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