Modi Govt Cuts Fuel Duties, ATF Tax Scrapped Amid Oil Shock & Market Jitters

In a decisive move amid a global energy crisis, the Government of India has slashed special additional excise duties on petrol and diesel while removing taxes on Aviation Turbine Fuel (ATF) for domestic flights. The decision aims to ease pressure on oil marketing companies and delay a potential spike in fuel prices triggered by soaring crude oil rates due to escalating tensions in West Asia. Finance Minister Nirmala Sitharaman called it a calibrated step to balance consumer relief and energy security, while Petroleum Minister Hardeep Singh Puri acknowledged the significant fiscal cost. However, the move has rattled markets—bond yields have surged, equities slipped, and the rupee weakened. With Centre stepping in, all eyes are now on states to cut VAT on fuels.