BJD MP Sasmit Patra highlighted concerns over the recent excise duty reduction on petrol and diesel, estimating a potential revenue loss of Rs 3-4 lakh crore for the Government of India. He emphasized the broader economic implications linked to the West Asia conflict, citing possible challenges arising from escalating oil prices and supply disruptions affecting economic growth.
Patra expressed apprehension that the surge in oil prices could lead to a slowdown in economic development, potentially impacting industrial production due to supply chain delays. He underlined the dependence of various industrial processes on fuels like propane, PNG, and LPG, cautioning about the overall weakening of the country’s economic situation.
While cautiously optimistic about diplomatic progress, Patra mentioned the ongoing discussions between Iran and the United States, hinting at a potential mediation path for resolving the conflict. He also noted recent developments allowing Indian ships to pass through the Strait of Hormuz, emphasizing the need for a swift resolution to the West Asia crisis to prevent further deepening impacts.
The recent excise duty cuts by the government, reducing petrol and diesel rates by Rs 10 per litre each, aim to mitigate the effects of soaring global oil prices. Additionally, exemptions on duties for fuel exports and supplies to foreign-going aircraft have been provided, along with customs duty relief on imported aviation turbine fuel (ATF), rescinding a previous 2022 notification.
Amid concerns of price hikes due to the global energy crisis triggered by geopolitical tensions, oil marketing companies (OMCs) are expected to absorb the duty reduction to offset their increasing losses. OMCs currently face significant losses per litre on fuel sales, primarily due to the elevated global crude prices, with efforts to stabilize the market amidst fluctuating oil prices.
Global oil prices have seen a decline, with Brent crude futures dropping by 2.29% to $105.53 per barrel and US WTI futures falling by 2.54% to $92.08, providing a slight respite amidst the ongoing energy market uncertainties.
