India is aiming up to 20% reduction in domestic fuel demand through voluntary behavioural and consumption changes, top government sources told NDTV Profit. The Centre's broader objective is to build a nationwide voluntary public movement to help India navigate global economic disruptions and energy market volatility. This includes greater use of public transport, car-pooling, use of electric vehicles, rail freight and work-from-home policies in the near-term for salaried employees.
The move comes amid concerns over high crude oil prices, supply disruptions over Strait of Hormuz blockade and the current geopolitical tensions. Several countries are exploring similar energy conservation and demand-management measures amid the surge in crude oil prices over the Middle East-led supply disruptions. The global fuel demand may need to reduce by 3-4% to stabilise energy markets. If India's consumption moderates, the demand pressure will automatically come down, helping cool off high prices, which will eventually reduce the stress on energy markets, according to government sources.
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This comes after Prime Minister Narendra Modi yesterday urged citizens to use imported petroleum products 'only as per need' in light of the ongoing Middle East crisis. Speaking at an event in Telangana on Sunday, PM Modi also revived several Covid-era practices, including work-from-home arrangements, online meetings and virtual conferences, arguing that reducing fuel consumption would help conserve foreign exchange reserves and cushion the economy from the impact of higher crude prices.
Domestically, markets reacted to remarks by PM Modi urging fuel conservation and restraint on gold purchases, which added to concerns around India's external balances. Frontline indices Sensex and Nifty 50 extended losses after opening sharply lower on Monday. Nifty is trading below 23,900, while Sensex slid over 1,000 points. The Indian rupee opened weaker against the US dollar and fell as much as 43 paise to 94.91 in early trade. Consumption stocks such as aviation, jewellery, textiles, hotels, and luxury plunged after the government's urgent stance over curbing domestic spends and use of petroleum products.
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