'Managed' deregulation

Govt decision to lower fuel prices rightly roils markets

The government decided last week to lower fuel prices at the pump in India, following a prolonged period of political pressure caused by the pass-through to consumers of high global prices for crude oil. Finance Minister Arun Jaitley said that the excise duty on fuel would be cut by Rs 1.50 a litre. This follows a series of hikes in duty on fuel over the period post-2014, when global crude oil prices were low. In addition, state-controlled oil-marketing companies were asked to reduce their prices by Rs 1, meaning that the benefit to consumers nationwide was Rs 2.50 a litre.