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| PM Modi’s Bold Decision | | | The Government of India (GoI) has taken a major decision to keep fuel prices in check by reducing Excise duty by Rs 10 per litre on both petrol and diesel with immediate effect. Prime Minister Narendra Modi’s bold move has ensured that no burden falls on the common man.
The decision to cut the Excise duty was taken in response to the steep and rapid rise in international crude oil prices, which have surged from approximately USD 70 per barrel to around USD 122 per barrel over the past month — an increase of nearly 75 per cent in under four weeks, driven by the ongoing conflict in West Asia and associated disruptions to global energy supply chains.
The excise reduction is not being passed on as a price cut at the pump. Instead, it directly reduces the under-recoveries being absorbed by public sector oil marketing companies.
Fuel prices sit at the heart of every economy. They influence not only transportation costs but also food prices, industrial production, and overall inflation. A sudden spike in global crude prices often translates into cascading effects across sectors, disproportionately impacting the common citizen. In such a scenario, the Centre’s intervention serves as a buffer, preventing an immediate and direct burden on households already navigating economic pressures.
What makes this move particularly noteworthy is its nuanced execution. Unlike previous instances where excise duty cuts were directly passed on to consumers through lower retail prices, this time the relief is being channeled towards reducing the under-recoveries of public sector oil marketing companies. This approach ensures that these companies—tasked with maintaining fuel supply stability—remain financially viable despite volatile global markets. By absorbing part of the shock at the fiscal level, the government is effectively sharing the burden, rather than shifting it entirely onto consumers or state-run enterprises.
The decision underscores a broader philosophy of governance that prioritizes economic stability alongside public welfare. The government’s willingness to forgo a portion of its revenue at a time when fiscal pressures remain significant is indicative of a people-centric approach. It also signals confidence in the resilience of the Indian economy, which has consistently demonstrated the capacity to withstand external shocks through prudent policy measures. |
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