India has slashed excise duties on diesel and gasoline to shield its state-owned refiners from the crushing weight of soaring crude oil prices. This move comes as the deepening conflict in the Middle East, particularly involving Iran, has disrupted global oil flows and sent prices sharply higher. The tax cuts aim to preserve refiner margins, which have been squeezed by the gap between rising import costs and controlled domestic fuel prices. Indian Oil Corporation and its peers face mounting losses as they absorb the cost difference.

The government's intervention seeks to prevent refiners from reducing production or seeking bailouts, ensuring fuel supply stability during a period of heightened geopolitical risk. Diesel and gasoline excise duties were cut by 5 rupees per liter, a significant reduction aimed directly at refiner profitability.