Fuel costs same since June 2022, govt tells Parliament. But oil prices have fallen by 1/3rd since then.
In Lok Sabha, Petroleum Minister Hardeep Puri says fuel prices set by oil marketing companies. But price of India’s crude import basket has dipped by 32% in last one year.
New Delhi: The Union government has once again stated that fuel prices are market-determined and set by oil marketing companies (OMCs), while also saying that prices of petrol and diesel have remained unchanged since June 2022. This is despite oil prices having fallen by a third since then.
The government has also not provided an explanation on why this is the case. According to the existing dynamic pricing policy adopted by the government, fuel prices are to be revised daily based on the prevalent price of oil that day.
In his written reply to a question in the Lok Sabha about fuel prices Thursday, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri said the central government reduced excise duty on fuel in two tranches, in November 2021 and May 2022, and that this reduction was passed on to the consumers, resulting in a fall in the retail prices of petrol and diesel.
In his reply, Puri also provided data on the changes in monthly price of petrol and diesel since April 2020. However, he did not provide any insight into why fuel prices had remained unchanged since June 2022.
“Prices of petrol and diesel have been market-determined with effect from 26.06.2010 and 19.10.2014, respectively,” Puri said in his written reply. He added that since then, “Public Sector Oil Marketing Companies (OMCs) take appropriate decisions on pricing of petrol and diesel”.
The government’s decisions in June 2010 and October 2014 were taken with an objective to peg the price of petrol and diesel in India to the price of oil, and to revise them daily, as opposed to the previous policy under which they were revised on a fortnightly basis.
ThePrint had reported in December 2022 how, despite this ostensible deregulation of fuel prices, data showed that fuel prices remained mysteriously unchanged before assembly elections, only to be changed soon after polling concluded.
In May 2023, ThePrint also reported how fuel prices had remained unchanged for over a year. Those prices have still not changed.
To put this in context, oil prices according to the Indian basket of crude oil (the reference price that India uses) have fallen 32 percent since June 2022, whereas fuel prices have fallen zero per cent since that time.
“The Central Government has reduced central excise duty by a total of Rs 13/litre and Rs 16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022,” Puri said in his reply. He added that the “excise reductions were fully passed on to consumers and retail prices fell as a result”.
“The measure was aimed to give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes,” the minister said, adding that subsequently, many states/UTs have also reduced VAT rates on petrol and diesel.
ThePrint reached the three oil marketing companies — Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation — for comment via call but had yet to receive a response by the time of publication. This report will be updated if and when a response is received.
In the past, however, these companies have declined to comment on all queries on oil prices and instead directed them to the Petroleum Ministry.
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