3 months ago
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The terms of petrol sold successful India has been reduced 1.9% since June 2022, adjacent arsenic the terms of lipid has fallen 41.5% since then, an investigation by The Hindu of authoritative information shows.
Data from the Petroleum Planning and Analysis Cell (PPAC) shows that the terms of oil, arsenic captured by the Indian handbasket of crude oil, roseate to implicit $100 a tube successful the play March-July 2022, soon aft Russia invaded Ukraine successful February that year.
Frozen prices
In effect to this spike, lipid selling companies (OMCs) accrued the terms of petrol to ₹105.1 per litre by April 2022. Following this, however, they froze prices astatine ₹96.7 per litre successful May 2022 erstwhile mean lipid prices jumped to astir $110 a barrel. Fuel prices were kept unchanged for much than 21 months thereafter, until mid March 2024.
This freeze, however, marked an unofficial digression from the authoritative dynamic pricing argumentation the authorities had adopted successful 2017 for petrol nether which OMCs were to hole the terms of substance connected a regular ground based connected prevailing lipid prices.
Oil prices roseate to $116 a tube by June 2022. Since then, however, the terms of lipid disposable to India for acquisition has fallen to an mean of $67.9 a tube by February 2025, a 41.5% fall. During this period, the terms of petrol sold successful India was reduced from ₹96.7 a litre to ₹94.8 a litre, a 1.9% reduction.
The Ministry of Petroleum and Natural Gas has repeatedly informed Parliament that the mounting of substance terms is the exclusive domain of the OMCs, and that the authorities has nary portion to play successful this.
‘Based connected convenience’
According to vigor assemblage analysts and experts, the OMCs person successful the past passed connected lipid terms hikes to consumers successful the signifier of higher petrol prices, but person not passed connected the benefits of falling lipid price.
“In a regulated system, the user would person been insulated from some kinds of shocks,” Rohit Azad, Professor astatine the Centre for Economic Studies and Planning astatine the Jawaharlal Nehru University (JNU), said. “However, successful this case, erstwhile crude lipid prices spell up, it is passed connected to consumers, but erstwhile it goes down, it is not reflected successful the prices. It is simply a mechanics based connected convenience.”
Role of excise duty
Notably, adjacent the 1.9% simplification successful petrol prices since June 2022 has been owed to cuts successful taxes connected substance alternatively than actions by OMCs to trim the underlying terms of petrol.
That is, the excise work connected petrol was chopped successful mid-March 2024 by ₹2/litre, reducing the terms from ₹96.7/litre to ₹94.7/litre. Since then, the terms has accrued marginally to ₹94.8/litre.
In effect to a query successful Parliament, Minister of State for Petroleum and Natural Gas Suresh Gopi pointed retired that, contempt determination being a ₹2 per litre hike successful the excise work of petrol successful April 2025, this was not passed connected to consumers.
India’s largest state-run OMC, IndianOil Corporation, did not respond to a petition for comment.
