Gradually phase out the excise cut on fuel: CII

Petrol and diesel prices may rise due to the surge in crude oil prices caused by supply disruptions amid the conflict in West Asia. Losses incurred by government oil marketing companies on the sale of petrol, diesel, and liquefied petroleum gas (LPG) have reportedly increased to ₹30,000 crore per month.

The strength of the Indian economy has enabled the country to withstand the situation so far, but the prolonged nature of the crisis is now worsening conditions.

During an inter-ministerial press conference held on May 8, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, stated that the financial condition of oil marketing companies is coming under pressure because they are continuously selling fuel at lower prices.

Sharma added that the Government of India has so far tried to keep fuel prices stable for consumers. But, Considering current crude oil prices and the mounting losses faced by companies, a 20% increase in petrol and diesel prices is considered necessary.

Meanwhile, the Confederation of Indian Industry (CII) has urged the central government to gradually phase out the ₹10-per-litre cut in Special Additional Excise Duty on petrol and diesel over the next six to nine months.

CII stated:

The longer the government delays increasing petrol and diesel prices, or keeps rates artificially low, the more severe the problem could become, potentially weakening the competitiveness of the economy.

“A phased restoration of fuel excise duty will gradually reduce the heavy burden on the government exchequer without adversely impacting consumer sentiment. Industry is also prepared to absorb a meaningful share of input cost pressures within its profit margins.”

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