The government is evaluating a multipronged approach to shield consumers to the extent possible from an imminent spike in petrol and diesel prices by reducing central excise duty, persuading states to cut value-added tax, directing state-run oil firms to absorb some revenue losses, and leveraging India’s trade ties with energy producers such as the United Arab Emirate (UAE) to ensure uninterrupted supply at affordable rates.
International oil prices surged to a 14-year high of over $139 a barrel on Monday with Russia’s ongoing invasion of Ukraine. Western sanctions against Russia and the American decision to ban Russian oil imports will further tighten the supply situation and make energy imports costlier for already bleeding Indian state-run refiners. This calls for an equitable sharing of the burden by all stakeholders, including the consumer, three persons with direct knowledge of the matter said requesting anonymity.
They said efforts are being made to pass on minimum burden to the consumer, but the timing and the quantum of hikes in petrol and diesel have not yet finalised.
