New Delhi: The government will continue to adopt appropriate fiscal and administrative measures to mitigate the impact of future fuel price volatility while maintaining fiscal sustainability, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
Since the beginning of the West Asia conflict, PSU OMCs have marginally increased the retail prices of petrol and diesel despite sharp increases in international crude oil prices, he said in a written reply to the Rajya Sabha.
He said despite severe disruptions in global energy markets, the measures taken by the government helped cushion the impact on consumers and the domestic economy.
In March, the government reduced the Central excise duty on petrol and diesel by Rs 10 per litre to protect consumers from the impact of elevated international crude oil prices. The excise duty reduction partly offset the under-recoveries being absorbed by public sector oil marketing companies (OMCs), enabling them to continue supplying fuel without disruption.
“The government’s strategy is to accommodate such measures within the available budgetary space by closely monitoring revenue and expenditure trends, reprioritising expenditure, and taking appropriate fiscal measures as warranted by evolving economic conditions,” Chaudhary said.
This enables the government to respond to unforeseen shocks, such as elevated international crude oil prices, while continuing to meet budgetary commitments, support macroeconomic stability and adhere to the fiscal consolidation path, he added.
Brent crude oil prices peaked at USD 138.2 per barrel in April 2026, exerting upward pressure on global energy prices and domestic producer prices. However, to protect consumers, the government limited the increase in domestic retail prices of petrol and diesel to a marginal level, he said.
“The Government will continue to adopt appropriate fiscal and administrative measures to mitigate the impact of future fuel price volatility while maintaining fiscal sustainability,” Chaudhary said.
He said ongoing efforts to strengthen domestic revenue mobilisation, adherence to the fiscal consolidation path, enhancing energy security through diversification of crude oil import sources and expansion of Strategic Petroleum Reserves, promoting alternative and cleaner fuels, and improving energy efficiency will reduce the economy’s vulnerability to external energy shocks while supporting sustainable and resilient economic growth.
Moreover, the impact on consumer prices remained relatively contained, with average CPI inflation at 3.9 per cent during April-June 2026, below the RBI’s inflation target of 4 +/-2 per cent.
