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Congress Member of Parliament Manish Tewari on Thursday questioned the long-term effectiveness of the Government's decision to slash excise and customs duties, calling it a 'band-aid approach' for a much larger global energy crisis.
Tewari, while speaking to the reporters, said, "... One can only manage a contingency by reducing excise and customs duty. The main point is up to what extent this band-aid approach would work, if we do not get sufficient crude oil and gas supply... The question is, what is the government doing to stop the West Asia war?" The Government announced a full customs duty exemption on select critical petrochemical products in view of the ongoing conflict in West Asia. According to an official statement, the exemption will remain in force till June 30, 2026, and aims to ensure the uninterrupted availability of essential petrochemical inputs for domestic manufacturing sectors. The government said the measure is intended as a temporary relief to stabilise supplies, ease input costs, and support downstream industries that depend heavily on such raw materials. The list of exempted items includes key petrochemical inputs such as anhydrous ammonia, methanol, toluene, styrene, vinyl chloride monomer, monoethylene glycol (MEG), phenol, acetic acid, and purified terephthalic acid (PTA), among others. Meanwhile, India's crude oil inventories remain adequate, with the government securing sufficient supplies for the next two months, said Sujata Sharma, Joint Secretary, Ministry of Petroleum and Natural Gas, on Wednesday during an inter-ministerial briefing amid the ongoing West Asia crisis. Assuring stability in fuel supply, Sharma said, "Our refineries are operating at the highest levels. There have been no reports of any dry-out at retail outlets." Highlighting global price trends, she noted, "Around two months ago, Brent crude was trading in the range of $70 per barrel, and today it has crossed $100 per barrel." Despite this sharp rise, she emphasised, "No increase has been made in petrol and diesel prices for domestic consumers." She added, "Petrol and diesel prices have not been increased since April 6, 2022, and in March 2024, prices were reduced by Rs 2, which continues to remain in effect." On government measures, Sharma said, "To protect domestic consumers from international price volatility, the Government of India reduced excise duty to ensure that there is no increase in prices." However, she acknowledged, "Prices have been maintained, resulting in under-recoveries for our Oil Marketing Companies (OMCs) on both petrol and diesel." 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. 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. (ANI)
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