MS Shanker
In the wake of Western sanctions on Russia following its invasion of Ukraine, global fuel markets faced volatility and uncertainty. Despite this, India has managed to secure its energy needs while keeping fuel prices stable, demonstrating strategic acumen in energy diplomacy and economic management. Union Minister Hardeep Singh Puri recently stated in Parliament that India is the only country where petrol and diesel prices have reduced over the past three years. This stability stems from a mix of diplomatic maneuvering, policy decisions, and tax adjustments that have shielded Indian consumers from excessive price shocks.
India, the world’s third-largest importer of crude oil, has strategically diversified its energy imports to maintain an uninterrupted supply. While Western nations imposed sanctions on Russian oil, India took advantage of discounted crude from Russia, bolstering its reserves and maintaining a steady supply. Additionally, Iran has remained a viable supplier, with India leveraging historical ties and diplomatic channels to ensure access to Iranian oil despite ongoing geopolitical tensions.
New Delhi’s pragmatic approach to energy procurement underscores its commitment to economic stability over external pressures. By refusing to succumb to Western demands to cut ties with Russian oil, India has prioritized affordability and supply security. This move has not only provided a buffer against global price fluctuations but also strengthened India’s negotiating position in the global energy market.
Prime Minister Narendra Modi’s government has actively intervened to prevent fuel prices from skyrocketing. The decision to cut central excise duties twice—first in November 2021 and again in May 2022—helped ease the financial burden on consumers. Additionally, BJP-ruled states passed on the benefits by reducing Value Added Tax (VAT), ensuring that fuel remained affordable for the public.
However, opposition-led states have taken a different approach. Despite vocal criticism of fuel prices, they have instead increased levies, further burdening consumers. Some states even raised prices on essential goods like milk, exacerbating inflationary pressures. This divergence in policy has resulted in noticeable differences in fuel costs across India, with BJP-ruled states offering relatively lower prices than opposition-controlled regions.
India’s fuel prices remain 15-25% lower than many neighboring countries and global markets. This is a testament to the government’s efforts to balance economic sustainability with consumer relief. While Western nations struggle with soaring inflation and energy costs, India’s prudent policies have ensured that petrol and diesel remain within reach for the common citizen.
Minister Puri emphasized that these measures reflect the Modi government’s commitment to economic relief and public welfare. By contrast, he pointed out that opposition parties, despite their rhetoric, continue to impose higher taxes, ultimately shifting the burden onto citizens.
As global uncertainties persist, India must continue its strategic approach to fuel management. Strengthening energy partnerships, expanding domestic refining capacities, and further optimizing tax structures will be key to maintaining price stability. With its current trajectory, India is positioning itself as a resilient player in the global energy landscape, ensuring economic security while prioritizing public welfare.
