India Cuts Petrol, Diesel Taxes Amid Middle East Crisis

On March 27, 2023, India’s Finance Minister Nirmala Sitharaman announced a reduction in taxes on petrol and diesel by 10 rupees per liter in response to the ongoing crisis in the Middle East, which has disrupted global energy supplies and driven oil prices higher. India, which relies on foreign suppliers for 85% of its crude oil, primarily from Russia, is taking these measures to cushion the impact on consumers.

Additionally, the government will impose new charges on the export of refined products, with diesel exports attracting a levy of 21.5 rupees per liter and aviation turbine fuel exports charged at 29.5 rupees per liter. The situation has worsened due to the conflict in the Middle East, particularly with Iran partially closing the strategic Strait of Hormuz, heightening fears of supply shortages worldwide.

Despite official reassurances regarding sufficient reserves, reports indicate panic buying in parts of the country, leading to long queues at filling stations. The oil minister, Hardeep Singh Puri, urged citizens to remain calm and disregard false information circulating about fuel shortages.