Nirmala Sitharaman on Fuel Prices: No Room for Fear Mongering as Revenue Loss Nears Rs 1 Lakh Crore
India is facing renewed pressure on household budgets as fuel prices continue to climb, but Union Finance Minister Nirmala Sitharaman has called for restraint in public reaction and a stronger focus on economic resilience.
Speaking on Monday, she noted that any reduction in excise duties on petrol and diesel would result in a revenue loss of nearly ₹1 lakh crore for the government. Her remarks came at a time when fuel prices have seen a sharp upward trend, with the latest increase pushing petrol up by ₹2.61 per litre and diesel by ₹2.71 per litre. This marks the fourth hike in just ten days, adding further strain on transport and daily expenses.
At the 37th anniversary event of the Small Industries Development Bank of India (SIDBI), the Finance Minister pushed back against what she described as a growing wave of negativity. She said it was important to counter a “pessimistic narrative” and emphasised that “India cannot afford fear mongering.”
She stressed that public discourse should reflect confidence rather than alarm, adding that both words and actions must help strengthen trust in the economy. According to her, while global conditions remain uncertain, India’s domestic economic fundamentals continue to show resilience.
Focus on fuel, fertiliser and forex
With the Middle East crisis nearing its third month, Sitharaman highlighted the importance of closely monitoring what she called the “three Fs”, fuel, fertiliser and forex. She pointed out that international pressures are mounting, with fertiliser prices rising to unprecedented levels and higher gold prices creating additional challenges for external stability.
She also said that the current economic strategy is aligned with Prime Minister Narendra Modi’s approach to handling global shocks. While acknowledging external risks, she rejected the idea that the economy is weakening, calling such claims exaggerated.
“All the good that is being done by the common people themselves, that is forgotten. And a pessimistic, cynical narrative is generated, which is just not right,” she said, adding that challenges are largely driven by global factors rather than domestic weakness. She further noted, "We should appreciate that the challenges are more externally driven. We must also recognise that India's domestic economic situation remains positive and resilient even today."
Reiterating her message, she said, “India cannot afford fearmongering. We need to give confidence to the people with our words and with our actions,” adding that some critics are unfairly dismissing India’s progress amid global uncertainty.
MSME payment delays under spotlight
Sitharaman also raised concerns about liquidity stress in the MSME sector, pointing out that around ₹8.1 lakh crore remains tied up in delayed payments. She said this blockage is affecting working capital and slowing growth, especially for smaller businesses.
To address this, she urged public sector undertakings to ensure payments are cleared within the mandated 45-day period, highlighting the importance of timely financial discipline for sustaining MSME health.
Global energy tensions add pressure
The recent fuel duty adjustments by the government, reducing the special additional excise duty on petrol to ₹3 per litre and removing it on diesel, come against the backdrop of ongoing global supply disruptions.
Energy markets continue to remain volatile due to tensions in the Middle East, particularly around the Strait of Hormuz, a key global oil transit route. Since the conflict escalated earlier this year, disruptions in the region have affected global energy flows, sending ripple effects across international markets, including India.
Despite these headwinds, the government maintains that the economy remains stable, even as it navigates inflationary pressures, supply uncertainties, and global geopolitical risks.
Speaking on Monday, she noted that any reduction in excise duties on petrol and diesel would result in a revenue loss of nearly ₹1 lakh crore for the government. Her remarks came at a time when fuel prices have seen a sharp upward trend, with the latest increase pushing petrol up by ₹2.61 per litre and diesel by ₹2.71 per litre. This marks the fourth hike in just ten days, adding further strain on transport and daily expenses.
At the 37th anniversary event of the Small Industries Development Bank of India (SIDBI), the Finance Minister pushed back against what she described as a growing wave of negativity. She said it was important to counter a “pessimistic narrative” and emphasised that “India cannot afford fear mongering.”
She stressed that public discourse should reflect confidence rather than alarm, adding that both words and actions must help strengthen trust in the economy. According to her, while global conditions remain uncertain, India’s domestic economic fundamentals continue to show resilience.
Focus on fuel, fertiliser and forex
With the Middle East crisis nearing its third month, Sitharaman highlighted the importance of closely monitoring what she called the “three Fs”, fuel, fertiliser and forex. She pointed out that international pressures are mounting, with fertiliser prices rising to unprecedented levels and higher gold prices creating additional challenges for external stability.She also said that the current economic strategy is aligned with Prime Minister Narendra Modi’s approach to handling global shocks. While acknowledging external risks, she rejected the idea that the economy is weakening, calling such claims exaggerated.
“All the good that is being done by the common people themselves, that is forgotten. And a pessimistic, cynical narrative is generated, which is just not right,” she said, adding that challenges are largely driven by global factors rather than domestic weakness. She further noted, "We should appreciate that the challenges are more externally driven. We must also recognise that India's domestic economic situation remains positive and resilient even today."
Reiterating her message, she said, “India cannot afford fearmongering. We need to give confidence to the people with our words and with our actions,” adding that some critics are unfairly dismissing India’s progress amid global uncertainty.
MSME payment delays under spotlight
Sitharaman also raised concerns about liquidity stress in the MSME sector, pointing out that around ₹8.1 lakh crore remains tied up in delayed payments. She said this blockage is affecting working capital and slowing growth, especially for smaller businesses.To address this, she urged public sector undertakings to ensure payments are cleared within the mandated 45-day period, highlighting the importance of timely financial discipline for sustaining MSME health.
Global energy tensions add pressure
The recent fuel duty adjustments by the government, reducing the special additional excise duty on petrol to ₹3 per litre and removing it on diesel, come against the backdrop of ongoing global supply disruptions. Energy markets continue to remain volatile due to tensions in the Middle East, particularly around the Strait of Hormuz, a key global oil transit route. Since the conflict escalated earlier this year, disruptions in the region have affected global energy flows, sending ripple effects across international markets, including India.
Despite these headwinds, the government maintains that the economy remains stable, even as it navigates inflationary pressures, supply uncertainties, and global geopolitical risks.
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