As assembly elections approach, a freeze on oil prices in India

State-controlled fuel retailers have frozen petrol and diesel rates — often aligned with daily movement of global oil prices — for more than a week, even as international crude oil prices surged by 12% during this period.

Pump prices have been frozen since February 27, a day after the Election Commission announced crucial assembly elections in five states, including West Bengal. There is also speculation that politically sensitive auto fuel prices will be reduced before polls start on March 27.

This will certainly have revenue implications, and the burden is likely to be shared equitably by the Centre through excise duty reduction, states by cutting value-added tax (VAT) and public sector oil marketing companies by absorbing some revenue losses as they are making profits. HT reported about an equitable burden-sharing plan on March 5.