India slashes fuel taxes due to Mideast war shortages: Finance minister

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NEW DELHI: India has announced significant tax cuts on petrol and diesel to protect its economy from the escalating energy turmoil caused by the Middle East war. Finance Minister Nirmala Sitharaman stated that "in view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced” by 10 rupees per litre each. This emergency intervention is designed to ‘provide protection to consumers from rise in prices" as the conflict disrupts global supply chains.

The move comes as India faces extreme volatility following the partial closure of the Strait of Hormuz, a critical trade route for its energy imports. To ensure domestic availability, the government also imposed new levies on fuel exports to "ensure adequate availability of these products for domestic consumption" and prevent refiners from prioritizing foreign markets. Petroleum Minister Hardeep Singh Puri noted that the government chose to ‘bear the brunt on its finances so that Indian citizen is insulated’ from international volatility.

Despite the fiscal strain, officials emphasized their commitment to stabilizing the market and preventing a ‘man-made’ shortage. While the nation maintains steady supplies, the tax cuts are a critical measure to calm public anxiety and prevent ‘unjustified panic’ that has led to long queues at filling stations. The government urged citizens not to be ‘misled by a deliberately mischievous, coordinated campaign of misinformation’ regarding fuel stocks during this geopolitical crisis.