Government May Review Petrol and Diesel Prices if Global Crude Oil Remains Low, Says Hardeep Puri
Fuel prices could be reconsidered in the coming weeks as lower international crude oil rates begin to reflect in the domestic market.
The Central Government may consider revising petrol and diesel prices if global crude oil prices continue to remain low over the next few weeks, Union Petroleum Minister Hardeep Singh Puri said on Thursday.
Speaking to reporters, Puri explained that fuel prices are linked to crude oil purchased several weeks earlier. Since oil marketing companies usually buy crude around two months in advance, they are currently refining crude that was purchased when international prices were much higher.
He said that although global crude oil prices have fallen in recent weeks, the benefit has not yet reached consumers because companies are still processing expensive crude bought during the peak of the West Asia conflict. If lower prices remain stable, the government will review the situation and consider its next steps.
According to the minister, public sector oil marketing companies recorded combined losses of Rs 74,781 crore up to June 30 after selling petrol, diesel, and LPG below their actual cost during the period of high international oil prices.
He also highlighted that despite the conflict in West Asia, India did not experience any fuel shortages, supply disruptions, or long queues at petrol pumps.
Retail fuel prices in the country increased by nearly Rs 7.50 per litre during the conflict. Initially, the government reduced import duty to soften the impact of rising global prices before allowing retail rates to increase.
During the crisis, the closure of the Strait of Hormuz pushed Brent crude prices close to 120 US dollars per barrel. At the same time, Indian oil marketing companies faced daily under recoveries of around Rs 2,400 crore.
Since then, international crude prices have dropped to nearly 70 US dollars per barrel after the United States and Iran signed a memorandum of understanding aimed at easing tensions and ending the conflict.
Meanwhile, private fuel retailer Nayara Energy has already reduced petrol prices by Rs 5 per litre and diesel prices by Rs 3 per litre at more than 7,000 of its fuel stations across the country.