India Decides to Keep Domestic Prices Unchanged Despite Global Oil Shock

India has taken a significant step to stabilize domestic fuel prices amidst a volatile global energy market, slashing federal excise duties on petrol and diesel by 10 INR/litre each for consumers. Concurrently, the government has imposed new export taxes of ₹21.5/litre on diesel and ₹29.5/litre on aviation fuel, aiming to reduce the financial strain on domestic oil companies while maintaining consistent retail costs. This policy decision is driven by India imperative to shield its massive domestic consumer base from runaway fuel costs, which directly fuel inflation, and to support the financial health of its state-owned oil companies. The 'global oil shock' that necessitates these measures is primarily a consequence of the ongoing Russia-Ukraine War, which has disrupted supply chains and imposed sanctions on a major energy exporter, coupled with strategic production adjustments by OPEC+ that have kept crude oil prices elevated worldwide.