New Delhi 15 April. The central government is considering introducing a new fuel price stabilization mechanism to control sudden fluctuations in the prices of petrol, diesel and LPG. According to the information received, this proposal is under discussion among various ministries and is aimed at providing relief to common consumers amid increasing volatility in the global market.
It is noteworthy that due to the ongoing tension in West Asia, global energy supply has been affected, due to which crude oil prices have increased and the risk of inflation has increased for import-dependent countries like India.
The government is thinking of preparing this scheme on the lines of the price stabilization model already implemented in the agricultural sector. In this model, when prices rise, prices are controlled by releasing buffer stock in the market.
Plan to create a separate fuel buffer fund for petroleum products
Similarly, there is a plan to create a separate fuel buffer fund for petrol, diesel and LPG to limit sudden rise in prices. The proposal would be different from India’s Strategic Crude Oil Reserve, which is used only in times of supply crises and not to control prices.
According to sources, under this mechanism the government will intervene on the basis of certain fixed parameters, such as a sharp increase in international crude oil prices or high volatility in the market. The aim of the government is not to provide permanent subsidy, but only to provide temporary relief during times of extreme fluctuations.
The plan is also to replenish this buffer fund once prices normalize, so that it can be used in future if needed. Overall, this step is being considered an important initiative towards providing relief to consumers from inflation and maintaining stability in the energy market.
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