Centre fact checks myths around petrol prices — Lists 6 factors that decide retail rates
The Union government recently busted myths around petrol prices as it defended retail petrol states across India. Arguing that fuel prices are not solely determined
The Union government recently busted myths around petrol prices as it defended retail petrol states across India. Arguing that fuel prices are not solely determined by Brent crude oil, the global benchmark, it several listed factors that decide retail rates. This social media post comes at a time oil prices crashed 7.3% in early Asia trade, after futures marked their biggest monthly gain since March and surged almost a quarter in July. Debunking myths around petrol prices Myth: "Crude oil prices have fallen so petrol should immediately be below ₹84/litre." Fact According to the Ministry of Petroleum and Natural Gas, petrol prices are not determined by crude oil prices alone.
Factors that influence retail prices are listed below International crude oil prices Exchange rates Freight and logistics Taxes Ethanol Procurement Refining and operational costs Centre issues clarification on ethanol blending Petroleum Ministry in a post on X stated, “Retail fuel prices are determined by several factors, while ethanol blending plays a vital role in reducing import dependence, improving energy security, and protecting consumers from global crude price volatility.” Myth: “E20 makes petrol expensive.” Fact: Contending that E20 does not make petrol costly, cheaper instead, the Centre said, “Nearly 20% of every litre of petrol sold today is domestically produced ethanol.” The Ministry listed few benefits of ethanol blending as under It reduces dependence on imports It reduces exposure to crude price shocks It improves energy security Improves farmer income It is environment friendly As per the Ministry's statement, the state-run Oil Marketing Companies (OMCs) had set average depot price of petrol at ₹85.8 per litre due to which they incurred under recoveries of ₹11 per litre during the period between March and June.
During this period, total under recoveries summed up to ₹21,300 crore. “Public Sector OMCs continued selling petrol below market-determined prices,” the ministry said. Since the US-Iran war began on 28 February, oil prices have been volatile and even soared as high as $120 due to disruption along Strait of Hormuz trade route through which
20% of global energy trade takes place. On Monday, Brent for October declined 7.3% and traded around $81.55 a barrel after US President Donald Trump said he’d agreed to call off a massive attack on Iran. He revealed that US allies in the West Asia, including Saudi Arabia, pushed him to pursue a deal.
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