Fiscal stress arising from LPG dependence a reality, govt to preserve capex: Expenditure Secretary

Expenditure Secretary V Vulanam on Friday said the fiscal stress arising from liquefied petroleum gas (LPG) dependence is a reality, but the government will preserve its capital expenditure at the budgeted Rs 12.2 lakh crore in Financial Year 2027 (FY27).

Secretary’s assurance comes even as energy-linked pressures and global uncertainty weigh on public finances.

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Amid the Iran war crisis, India’s reliance on LPG imports exposes the fiscal position to global price volatility and supply risks.

A significant share routed through the Strait of Hormuz increases vulnerability to geopolitical disruptions, which can raise subsidy outgo and strain government finances.

While speaking at the ICPP Growth Conference, V Vulanam said, “Fiscal stress is a reality with LPG, as we import 60 percent of our requirement and 90 percent of that comes through the Strait of Hormuz. We are committed to preserving capex at Rs 12.2 lakh crore in FY27 and ensuring that infrastructure, including roads and railways, receive full funding despite the stress.”

The government will continue to prioritise capital expenditure, particularly in infrastructure and railways, he said.

Vulanam further said the foundation of transparency in public finances has been adopted over the last 10 years. Fiscal prudence and focus on priority sectors were outlined in the Budget.

Centre has revised export duties on diesel and aviation turbine fuel (ATF) for the next fortnight starting May 1, even as retail prices of petrol, diesel and LPG will remain unchanged for consumers, according to official notifications and a statement by Indian Oil Corporation (IOC).

The move comes at a time when global crude prices have surged, with Brent touching $126 per barrel amid geopolitical tensions in West Asia.