Centre Slashes Fuel Duty Amid Middle East Crisis; Thakur Welcomes

Amid rising global uncertainty due to the ongoing conflict in the Middle East, the Government of India's decision to slash import duty on petrol and diesel has drawn political reactions, with Leader of the Opposition and former Himachal Pradesh Chief Minister Jai Ram Thakur welcoming the move and calling it a historic step.

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The Centre's decision comes at a time when global oil supply chains are under strain due to the conflict in the Middle East, a region that accounts for a major share of the world's crude oil production. The reduction in import duty is expected to provide relief to oil marketing companies (OMCs) and help cushion domestic fuel prices in the near future.

Thakur Hails Centre's Move, Criticises State Govt

Speaking to ANI in Shimla, Thakur said the Middle East conflict has created a situation of oil shortage globally, impacting fuel prices. He thanked Prime Minister Narendra Modi for taking what he described as a decisive step to shield the poor and common man from the burden of rising fuel costs.

Thakur said the Centre has significantly reduced the burden on petrol and diesel, noting that the decision aims to prevent global price volatility from affecting Indian consumers. "This is a historic decision taken to ensure that rising oil prices do not impact citizens," he said.

At the same time, Thakur criticised the Himachal Pradesh government, alleging that while the Centre is working to reduce fuel prices, the state government is moving in the opposite direction by increasing taxes on petrol and diesel. He said the state should take cues from the Centre and reconsider its policies in light of the ongoing global crisis.

Call for Coordinated Efforts

Describing the seriousness of the situation, Thakur said the conflict in the Middle East remains unresolved and continues to pose a challenge to global oil supplies. He stressed the need for continuous monitoring of the situation and coordinated efforts between the Centre and states.

Referring to recent developments, Thakur said the Prime Minister is expected to engage with chief ministers to assess the situation and discuss measures to mitigate the impact of the crisis, particularly on fuel availability and pricing. He reiterated that proactive steps and coordination are essential to ensure that the ongoing crisis does not adversely affect the country's economy or its citizens.

Details of Duty Cut and Geopolitical Context

The Central government reduced excise duty on petrol to Rs 3 per litre and brought it down to zero for diesel, as per a Gazette notification issued under the provisions of the Central Excise Act, 1944. Additionally, a windfall tax of Rs 21.5 per litre has been imposed on diesel exports.

The decision follows escalating tensions in West Asia, particularly the ongoing conflict involving the United States, Israel, and Iran, which has led to a blockade of the Strait of Hormuz--a crucial route that handles nearly one-fifth of the world's crude oil supply. Before the crisis, India sourced around 12-15% of its oil imports through this route.

Market Impact and Supply Assurance

While the duty cut is expected to ease pressure on oil marketing companies facing losses due to surging crude prices, retail prices of petrol and diesel have remained unchanged so far. The government has maintained that fuel supplies across the country remain stable.

The Ministry of Petroleum and Natural Gas, in an official statement, assured that "all retail outlets are operating normally across the country" and that there are "adequate stocks of petrol and diesel available at all petrol pumps." It also urged citizens not to engage in panic buying amid circulating rumours.

Officials added that refineries are functioning at high capacity with sufficient crude inventories, and domestic LPG production has been ramped up to meet demand. (ANI)