High energy cost transfer 'inevitable' to users: Finance ministry The Union Finance Ministry has stated that it is "inevitable" for countries to pass on higher energy costs to households and industries, emphasizing that this process is already underway in some nations. In its monthly economic review, released on Wednesday, the ministry noted that while certain countries have begun allowing energy price increases to be passed on to end-users, others have not. However, it warned that this transfer is unavoidable, particularly during periods of supply disruption. The ministry highlighted that without a moderation in demand, countries risk paying significantly higher prices for energy supplies in the long term. The review also called for maintaining macroeconomic stability, cautioning that any attempts to artificially boost near-term growth could jeopardize medium- to long-term economic prospects. The ministry further suggested that the challenges posed by the energy crisis will persist for an extended period, as restoring energy supplies will take time. It criticized international agencies for assuming a rapid return to normal energy production and shipping, pointing out that such forecasts often overlook the time required to rebuild production capacity and resume global trade. The ministry warned that energy prices may remain elevated for an extended period. India's crude oil basket averaged $113 per barrel in March, with prices just under $115 per barrel in April. According to an ICRA report, marketing margins for petrol and diesel are currently estimated at negative Rs 14 per litre and Rs 18 per litre, respectively. The report also noted that domestic LPG under recoveries are projected to reach Rs 80,000 crore for the fiscal year 2027.#energy_security #strategic_reserves #union_finance_ministry #icra_report #fiscal_year_2027
