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India’s reluctance to raise fuel prices has created a major domestic shortage

The Indian government has cut excise duty on petroleum products twice over the past year to make things easy for Indian households grappling with high consumer prices. Under these circumstances, oil marketing firms such as Oil and Natural Gas Corporation (ONGC), Reliance Industries (RIL), Oil India, and Vedanta’s Cairn Oil and Gas, among others, have resorted to export of petroleum products to Europe and Australia for better monetary returns. This, however, has resulted in a fuel shortage domestically, with many petrol pumps in several states even shutting down.

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