Hours after the fourth hike in pump prices for petrol and diesel in 11 days, Union Finance Minister Nirmala Sitharaman on Monday said that the crisis in West Asia is not just a geopolitical issue, but it will lead to higher fuel costs for the common people.The Finance Minister called for increased focus on fuel, fertiliser and forex amid the West Asia crisis, underlining that the domestic economy continues to be resilient.
Speaking at an event to celebrate the 37th anniversary of SIDBI in Mumbai, the Finance Minister said, the cut in diesel and petrol excise duties will lead to a revenue impact of one lakh crore rupees. She said, high gold prices are creating some challenges on the external front. She said the country’s policy response has been calibrated to preserve domestic growth. She hit out at naysayers for creating a cynical and pessimistic narrative after Prime Minister Narendra Modi’s appeals on altruism, pointing out that India cannot afford fear mongering.
She said the government is sacrificing Rs 1 lakh crore of revenue by cutting the excise duties on diesel and petrol. “The West Asia crisis is not only a diplomatic or geopolitical issue. For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital and uncertainty in export orders,” the finance minister said.
Pertinently, Petrol prices were raised by Rs 2.61 a litre and diesel by Rs 2.71 on Monday, marking the fourth increase in less than two weeks that extended a delayed pass-through of soaring global crude oil costs triggered by the West Asia conflict.The latest increase brought cumulative hikes since May 15 to nearly Rs 7.50 per litre.She acknowledged that it is a challenge for the small business units to plan for the future, and also added that the crisis, which has been running for over 80 days now is also a challenge for countries, including India.
The government’s approach is focused on protecting citizens, supporting micro, small and medium enterprises, safeguard exporters and keeping supply chains moving and maintaining economic stability, she said.
The minister said the government has taken a series of steps to protect exporters, including the simplifiation of customs formalities, which ensured that enterprises were able to bring back cargo, reroute them or store and trans-ship the stranded cargo.
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