NEW DELHI: Excise task cuts combined with VAT (value-added tax) reduction by states kept fuel inflation in check amid flaring oil costs, the Economic Survey stated on Tuesday however did not raise hopes of instant reduction in pump costs.

Inflation in the fuel and power organizing in the WPI (wholesale rate index) was mostly driven by high oil prices, prompting the federal government to react by adjusting the import tax task on gas and diesel, the governments transcript on the economy said.In the preliminary, excise responsibility was cut on fuel by Rs 5 per litre and diesel by Rs 10 from November 4, 2021.

In the second round, task on fuel was slashed by Rs 8 per litre and diesel by Rs 6 from May 22, 2022.

Ever since, fuel and diesel rates have not been raised by state-run fuel merchants who provide 90% of the market.

This has resulted in heavy losses for the 3 main sellers in spite of the Centre offering a grant of Rs 22,000 crore to bridge losses from domestic LPG.

The small amounts in pump costs assisted keep input costs in check for farmers, transporters along with market, which ultimately avoided the cost of living from surging in tune with runaway worldwide energy prices as it took place in the United States, UK and Europe.The two task reductions likewise erased the task walkings impacted in 2020 when oil prices crashed listed below $20 as demand wilted after the Covid-19 pandemic closed down the world.The Indian Basket-- or the mix of crude purchased by Indian refiners-- stayed in the range of $20-65 per barrel in 2020-21.

Thereafter, rates started rising on account of unprecedented cuts in crude oil supply by Opec and other oil-producing nations, the Survey said.The upward pattern continued in FY22 and FY23 as demand picked up with the easing of Covid-19 constraints in the majority of areas of the world.

The Indian Basket peaked at $116 per barrel owing to provide disturbance amid increasing tensions in eastern Europe and the Middle East in June 2022.

Consequently, the cost declined to $78 per barrel in December 2022 and is presently hovering around $86.