Saturday Mar 28, 2026
Saturday Mar 28, 2026
Saturday, 28 March 2026 00:47 - - {{hitsCtrl.values.hits}}
India and Vietnam have both slashed taxes on fuel in a bid to contain the impact on domestic costs from rising global oil prices.
India has sharply reduced special excise duties on petrol and diesel as volatile global oil prices and supply disruptions linked to the Iran conflict strain its energy import bill and fiscal position.
In a gazette notification issued on Thursday, India’s Finance Ministry reduced the special excise duty on petrol to 3 Indian rupees per litre from 13 Indian rupees, while cutting the duty on diesel to zero from 10 Indian rupees.
The move comes amid heightened uncertainty in global energy markets following disruptions to supplies through the Strait of Hormuz, a key transit route for a significant share of global crude flows, with knock-on effects on shipping and gas availability.
The Indian Government did not disclose the fiscal cost of the tax reduction. However, Emkay Global Economist Madhavi Arora estimated the annualised revenue impact at about 1.55 trillion Indian rupees, noting that the cuts could offset around 30% to 40% of the losses incurred by oil marketing companies on auto fuels at current price levels.
India, the world’s third-largest importer and consumer of crude oil, remains highly exposed to external shocks, meeting more than 90% of its oil requirements through imports.
Despite the supply disruption and price volatility, authorities have not moved to restrict exports of refined petroleum products, unlike some other major economies.
Prime Minister Narendra Modi’s administration has maintained that supply arrangements remain intact, including for fertiliser availability ahead of the summer sowing season and coal supplies to meet rising electricity demand.
Energy dependence extends beyond crude, with India consuming 33.15 million metric tons of cooking gas last year, of which around 60% was met through imports. Nearly 90% of these imports originated from the Middle East, underlining the country’s exposure to regional geopolitical risks.
India has also imposed export duties on diesel and aviation fuel to secure domestic supply as officials insist supplies remain stable, but panic buying has triggered long queues at petrol stations. Authorities have urged the public “not to be misled” by misinformation as fears of shortages spread.
The Reuters news agency reports that Vietnam’s Finance Ministry has suspended an environmental protection tax and special consumption tax on fuels to stabilise the domestic market amid rising oil and gas prices due to the war on Iran.
The removal of the taxes on petrol, diesel and jet fuel will be effective until 15 April, the Ministry said in a statement.
