Global crisis: India eyes fuel tax cuts, limits oil exports as Nigeria keeps mute

INDIA has taken fresh steps to shield its domestic fuel market and ease pressure on consumers by lowering taxes on petrol and diesel while introducing new levies on fuel exports.

Finance Minister Nirmala Sitharaman announced on Friday that the government has reduced central excise duties on petrol and diesel for local consumption by 10 rupees ($0.11) per litre each. She said the move is aimed at cushioning households from rising fuel costs triggered by global tensions in West Asia, Oilprice.com reported.

The government also introduced export duties on refined fuels, setting rates at 21.50 rupees ($0.23) per litre for diesel and 29.50 rupees ($0.31) per litre for aviation fuel. According to Sitharaman, the policy is designed to prioritise domestic supply and ensure adequate availability within the country.

India, the world’s third-largest crude oil importer, has been particularly exposed to the ongoing supply disruption due to its heavy reliance on Middle Eastern crude, which accounts for roughly half of its imports. The situation is compounded by the fact that about 90 percent of its liquefied petroleum gas (LPG) shipments, widely used for cooking, previously passed through the Strait of Hormuz before the conflict escalated.

READ ALSO: China stops fuel exports as Hormuz crisis threatens global supply

The supply squeeze has already begun to affect consumption patterns, with LPG demand declining in March. In response, authorities have curtailed supplies to industries and commercial users to prioritise households.

With global crude prices surging, the Indian government is now balancing fiscal pressure with consumer protection. Oil Minister Hardeep Singh Puri acknowledged that the state is absorbing significant revenue losses in a bid to ease the burden on both consumers and oil marketing companies.

He added that while the government is sacrificing tax income, the newly imposed export duties are necessary to discourage overseas sales at a time when international fuel prices are soaring, ensuring more products remain available for domestic use.

Nigerian govt’s lack of action

However, up till now, the Nigerian government is yet to unveil any strategic policy to ease the oil price hike pressure on consumers. With subsidies gone, Dangote Petroleum Refinery is importing much of its crude and citizens are paying the market price – no matter what it is. While various nations have made plans to ease the pressure on its citizens, the Nigerian government simply says it cannot control the oil market.

READ ALSO: Tinubu to critics: Nigeria now net products exporter, oil production has rebounded to 1.68mbpd

On March 12, Finance Minister, Mr Wale Edun, said the Nigerian government would not intervene to regulate petrol prices despite growing volatility in global oil markets triggered by the escalating conflict in the Middle East.

According to the minister, the government prefers market-driven solutions rather than direct price control.

“When there is market failure is where the regulator steps in. But in terms of balancing pricing, what we are looking to do is to manage the disruption and we don’t know how permanent or temporary it could be,” Edun said.

“But in the meantime, rather than reverting back and taking backward steps, we’ll look at every other measure that we have that can help the cost of living of Nigerians.”

Up till now, the government has not unveiled any ‘other measure’ to ease the fuel price-driven pressure on Nigerians.