Union Petroleum Minister Hardeep Singh Puri on Friday said the government has chosen to absorb massive financial losses instead of passing on the burden of rising global crude oil prices to Indian consumers, as geopolitical tensions continue to push energy markets into volatility.
International crude oil prices have surged sharply over the past month, rising from nearly $70 per barrel to around $122. This spike has triggered fuel price hikes across the world, with increases ranging from 20% in Europe to as high as 50% in parts of Africa and Southeast Asia. Despite this global trend, India has kept domestic fuel prices relatively stable.
Puri stated that the government faced a difficult choice between increasing fuel prices for citizens or absorbing the financial shock. The Centre decided to shield consumers from the volatility of international markets, even as other countries passed on the burden to their populations.
To cushion the impact, the government has taken a significant hit on its tax revenues, including reductions in excise duties. Oil marketing companies are also bearing heavy losses, estimated at around ₹24 per litre on petrol and ₹30 per litre on diesel, due to the gap between global prices and domestic retail rates.
In addition, the government has imposed export taxes on fuel to ensure adequate domestic availability and prevent excessive overseas sales by refineries during a time of global shortage. These steps are aimed at maintaining supply stability within the country.
The minister highlighted that this approach follows a similar strategy adopted during the Russia-Ukraine conflict, when the government prioritised protecting citizens from global price shocks and ensured stable fuel availability.
Puri also credited the leadership of Narendra Modi and Finance Minister Nirmala Sitharaman for taking what he described as a timely and bold decision in the national interest.
As global energy markets remain uncertain, India’s decision to absorb the impact reflects a consumer-first policy aimed at maintaining stability and preventing sudden financial strain on households, even as the government and oil companies face increasing pressure.
