Summary：**Oil Price Drop Removes Tax Relief for Kerosene, LPG, Raising Household Bills***Introduction* A re

**Oil Price Drop Removes Tax Relief for Kerosene, LPG, Raising Household Bills**

*Introduction*
A recent slide in global crude prices has triggered an unintended consequence for millions of households that rely on kerosene and liquefied petroleum gas (LPG) for cooking and heating. As benchmark Brent crude fell below $75 a barrel, the government’s automatic fuel‑tax relief mechanism—designed to kick in when prices rise—has been switched off. The result is a sharp uptick in retail costs for these essential fuels, squeezing already tight family budgets.

*Key Developments*
The Ministry of Finance announced on Monday that the special excise‑duty waiver, which had lowered kerosene and LPG prices by roughly 15 % since early 2023, will expire at the end of the month. Officials cited the “price‑trigger clause” embedded in the 2022 Energy Affordability Act, which ties relief to a reference price of $80 per barrel. With current spot prices hovering around $73, the condition for continued relief is no longer met. Retailers have already begun passing the full tax burden onto consumers, with kerosene up 12 % and LPG climbing 9 % in major urban markets within a week of the announcement.

*Industry Analysis*
Analysts say the policy’s design, while well‑intentioned, creates a pro‑cyclical effect that exacerbates cost‑of‑living pressures when markets dip. “The mechanism was meant to shield consumers from spikes, not to withdraw support during downturns,” noted energy economist Priya Mehta of the Institute for Fiscal Studies. She added that the sudden removal of relief could push up to 8 million low‑income households into energy poverty, particularly in rural areas where kerosene remains a primary cooking fuel. Industry groups warn that the higher costs may also incentivize a shift back to more polluting biomass fuels, undermining recent gains in indoor air quality.

*Future Outlook*
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