Tag Archives: petrol

Government slashes excise duty on Petrol, Diesel despite surge in global oil prices

Posted on by
Reply

The Government of India has reduced excise duty by ₹10 per litre on petrol and diesel with immediate effect following a sharp rise in global crude prices. The move, announced amid a surge from about $70 to $122 per barrel in March 2026, is aimed at supporting state-run oil companies while keeping retail fuel prices unchanged. The decision follows disruptions linked to conflict in West Asia and seeks to ensure supply stability across India. The policy also includes a new export levy on diesel.

The price on the fuel pump did not move. Behind the scenes, the economics shifted sharply.

India’s decision to cut excise duty on petrol and diesel by ₹10 per litre comes at a moment when global crude prices have climbed rapidly, reshaping fuel markets across continents. Over the past month, benchmark crude rose from roughly $70 to $122 per barrel, a jump of nearly 75 percent driven by supply disruptions linked to tensions in West Asia.

For Indian consumers, the immediate impact is stability. Retail prices remain unchanged. For the country’s oil marketing system, the change is more consequential.

Fuel excise cut offsets mounting OMC under recoveries

The excise reduction is not being passed on as a price cut at petrol pumps. Instead, it directly reduces the financial burden carried by public sector oil marketing companies.

These companies, including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, have continued supplying fuel at prices below their cost of procurement.

At current international levels, under recoveries are estimated at about ₹26 per litre on petrol and ₹81.90 per litre on diesel. The combined daily loss absorbed by these firms is around ₹2,400 crore.

The ₹10 per litre excise cut offsets a portion of these losses, easing pressure on company balance sheets while allowing retail prices to remain steady.

This approach shifts the fiscal burden from consumers to the government. Lower excise collections reduce revenue, but they prevent a direct pass-through of global price volatility to households and businesses.

Global fuel price surge and India’s price stability strategy

Fuel prices have risen sharply in many parts of the world since the latest oil shock began. According to government data, prices have increased by 30 to 50 percent across South and South-East Asia, about 30 percent in North America, and roughly 20 percent in Europe.

India has diverged from that trend by holding retail prices steady, a strategy that relies on a combination of tax adjustments and loss absorption by public sector companies.

The policy reflects a broader approach seen during earlier global disruptions, including the period following the Russia Ukraine conflict 2022, when similar measures were used to limit domestic price increases.

Minister for Petroleum and Natural Gas Hardeep Singh Puri said the government faced a choice between raising prices or absorbing the impact.

“The Government had two choices: either increase prices drastically for citizens of Bharat as all other nations have done, or bear the brunt on its finances so that the Indian citizen is insulated from international volatility,” Puri said.

He added that the decision was taken to reduce the losses faced by oil marketing companies during a period of elevated global prices.

Diesel export levy introduced to secure domestic supply

Alongside the tax cut, the government has introduced an export levy on diesel. The measure aims to discourage refiners from diverting supply to international markets where prices are currently higher.

By prioritizing domestic availability, the policy seeks to ensure that fuel supplies at Indian pumps remain uninterrupted despite global market pressures.

The move reflects a balancing act between commercial incentives and domestic energy security. High global prices can make exports more attractive for refiners, but reduced domestic supply could lead to shortages or price spikes within the country.

India’s latest intervention underscores the scale of the current oil shock and its ripple effects across national economies. By absorbing part of the impact through fiscal measures, the government is attempting to stabilize both supply and pricing in a volatile global environment.

Quick Analysis: What’s Middle East Conflict’s Potential Impact on Global Economy? 4 Possible Future Scenarios

Posted on by
Reply

Wall Street’s main indexes opened lower on Wednesday after escalation in geopolitical tensions in the Middle East though markets are likely not to come under sway. Here’s the impact visible so far and the possible future scenarios:

  • Israeli Retaliation: Iran’s missile strike on Israel, involving 180 ballistic missiles, significantly raises the chances of an Israeli counterattack. A likely target could be Iran’s Kharg Island facility, which handles 90% of the country’s oil exports.
  • Economic Risk: If Israel strikes and Iran responds by restricting access to the Strait of Hormuz—through which 20% of the world’s daily oil supply passes—crude oil prices could surge above $100 per barrel, similar to the 2022 spike following Russia’s invasion of Ukraine.
  • Central Bankers on Edge: The U.S. Federal Reserve and European Central Bank (ECB) are closely monitoring these developments. Energy price hikes from a prolonged conflict could derail plans to reduce interest rates, potentially reigniting inflation that central banks have worked hard to control.
  • Energy Supply Shock: Despite current stability—due to minimal casualties and Israel’s potential focus on Hezbollah in Lebanon rather than direct strikes on Iran—a severe disruption in oil exports would trigger energy supply shocks. Saudi Arabia’s ability to increase oil production could soften the blow, but sustained tensions could strain global supplies.
  • Inflation Dilemma: Central banks, especially in the U.S. and Europe, struggled to manage energy shocks during the 2022 power crisis, which led to inflation spiking to high-single-digit levels. A similar surge, along with other inflationary factors like the U.S. longshoremen strike, could force central bankers into a tough choice: either continue rate cuts and risk further inflation or pause/raise rates and push the economy toward recession.
  • Investor Sentiment: As of now, markets seem unaffected by these risks. In Europe, traders expect the ECB to cut rates again on October 17, while U.S. derivative prices suggest the Fed’s rates could fall to 3% by October 2025 from the current 4.9%.
  • Geopolitical Ripple Effect: Israeli Prime Minister Benjamin Netanyahu vowed Iran would pay for the attack, while Tehran warned of “vast destruction” in case of retaliation, signaling the possibility of a wider regional conflict. Any involvement by Israel’s allies could lead to a broader confrontation, further unsettling global markets.
  • Immediate Market Impact: Oil prices have already risen by 5%, with Brent crude trading at $75.3 per barrel amid concerns about escalating tensions.

Possible Future Scenarios

  1. Surge in Oil Prices: A direct strike on Iranian infrastructure, or a disruption in the Strait of Hormuz, could send oil prices soaring above $100 per barrel. This would have immediate inflationary consequences for the global economy, forcing central banks to reconsider planned interest rate cuts.
  2. Inflationary Pressures: A prolonged Middle East conflict could trigger another energy crisis, worsening inflation in the U.S. and Europe. Central banks may be forced to halt or reverse rate-cutting plans, risking a global economic slowdown or recession.
  3. Geopolitical Instability: Any military escalation between Israel and Iran could lead to broader regional conflict, drawing in global powers and further disrupting oil supplies. This could amplify investor fears and market volatility.
  4. Delayed Monetary Easing: If inflation spikes due to rising energy costs, the U.S. Federal Reserve and ECB may delay or slow down their plans for monetary easing, prolonging high borrowing costs and hindering economic recovery efforts. Even RBI might delay its decision to ease interest rate cuts now.

Air pollution is more dangerous for women than men: Study

Posted on by
Reply

The impact of breathing diesel exhaust fumes may be more severe for females than males, according to new research that will be presented at the European Respiratory Society International Congress in Barcelona, Spain [1].

Researchers looked for changes in people’s blood brought about by exposure to diesel exhaust. In both females and males, they found changes in components of the blood related to inflammation, infection and cardiovascular disease, but they found more changes in females than males.

The research was presented by Dr Hemshekhar Mahadevappa, from the University of Manitoba, Winnipeg, Canada and was a collaboration between two research groups led by Professor Neeloffer Mookherjee at the University of Manitoba and Professor Chris Carlsten at the University of British Columbia, Vancouver, Canada. Dr Mahadevappa told the Congress: “We already know that there are sex differences in lung diseases such as asthma and respiratory infections.

Air pollution/Photo:en.wikipedia.org

Research showed that breathing diesel exhaust creates inflammation in the lungs and has an impact on how the body deals with respiratory infections. In this study, we wanted to look for any effects in the blood and how these differ in females and males.”

The study involved ten volunteers, five female and five male, who were all healthy non-smokers. Each volunteer spent four hours breathing filtered air and four hours breathing air containing diesel exhaust fumes at three different concentrations – 20, 50 and 150 micrograms of fine particulate matter (PM2.5) per cubic metre – with a four-week break in between each exposure.

Volunteers donated blood samples 24 hours after each exposure and the researchers made detailed examinations of the volunteers’ blood plasma. Plasma is the liquid component of the blood that carries blood cells as well as hundreds of proteins and other molecules around the body. Using a well-established analysis technology called liquid chromatography–mass spectrometry, the researchers looked for changes in the levels of different proteins following exposure to diesel exhaust and compared the changes in females and males.

Airpollution/Photo:en.wikipedia.org

Comparing the plasma samples, the researchers found levels of 90 proteins that were distinctly different between female and male volunteers following exposure to diesel exhaust. Among the proteins that differed between females and males, were some that are known to play a role in inflammation, damage repair, blood clotting, cardiovascular disease and the immune system. Some of these differences became clearer when volunteers were exposed to the higher levels of diesel exhaust.

Professor Mookherjee explained: “These are preliminary findings, however they show that exposure to diesel exhaust has different effects in female bodies compared to male and that could indicate that air pollution is more dangerous for females than males.

“This is important as respiratory diseases such as asthma are known to effect females and males differently, with females more likely to suffer severe asthma that does not respond to treatments. Therefore, we need to know a lot more about how females and males respond to air pollution and what this means for preventing, diagnosing and treating their respiratory disease.”

Air pollution/photo:en.wikipedia.org

Professor Zorana Andersen from the University of Copenhagen, Denmark, is Chair of the European Respiratory Society Environment and Health Committee and was not involved in the research. She said: “We know that exposure to air pollution, especially diesel exhaust, is a major risk factor in diseases such as asthma and chronic obstructive pulmonary disease. There is very little we can do as individuals to avoid beathing polluted air, so we need governments to set and enforce limits on air pollutants.