When will petrol, diesel get cheaper? Petroleum Minister Hardeep Singh Puri answers amid cooling Brent price
With cooling of brent crude prices, all eyes are on petrol and diesel rates and next move of domestic retailers. Easing of tensions in West
With cooling of brent crude prices, all eyes are on petrol and diesel rates and next move of domestic retailers. Easing of tensions in West Asia and US and Iran's progress in peace talks towards a lasting accord can be attributed to recent softening in international energy markets. Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on Thursday provided an answer to most concerning question on fuel price as masses await cuts in petrol and diesel prices. While addressing a press briefing, Puri provided crucial context regarding the financial state of state-run Oil Marketing Companies (OMCs). Suggesting that any future adjustment in petrol and diesel prices depends on international prices, he said, “If the question is, when will you break prices down? Well, they (OMCs) are still carrying the stock which was bought at a higher price with higher insurance, higher freight rates. If this (low crude prices) persists next two, three months, then that would be a legitimate question." Responding to further queries on fuel price revision, he added, "If crude prices remain at these levels for the next few weeks, cutting petrol and diesel prices will be a legitimate question that everybody asks.
But what the situation will be then, it is not right for me to speculate." Quick answers to key questions • 5 QUESTIONS 1 When can we expect cheaper petrol and diesel prices in India? ⌵ Petrol and diesel prices in India may be cut if international crude prices remain low for the next two to three months, as indicated by Petroleum Minister Hardeep Singh Puri. 2 Why haven't petrol and diesel prices been reduced despite falling crude prices? ⌵ Petrol and diesel prices have not been reduced because Oil Marketing Companies (OMCs) are still processing crude oil purchased at higher prices prior to the recent decline in global oil prices. 3 How do international crude oil prices affect domestic petrol and diesel rates? ⌵ Domestic petrol and diesel rates are influenced by international crude oil prices, as OMCs' financing and stock levels are based on the prices at which they acquired crude oil, typically two months in advance. 4 Should consumers expect immediate fuel price cuts now that crude oil prices have decreased? ⌵ Immediate fuel price cuts are unlikely, as OMCs need time to adjust their prices based on current lower crude prices and their existing inventory costs.
5 What are the recent trends in international crude oil prices and their impact on India? ⌵ International crude oil prices have recently fallen, mainly due to stabilized geopolitical tensions, but significant impacts on domestic fuel prices depend on how long these lower prices persist. According to Petroleum Minister, oil retailers incurred losses and under-recoveries of ₹74,781 crore in the June-end quarter by selling petrol, diesel, and LPG below cost, implying that the actual loss and under-recovery are both very high. Emphasizing that OMC's are still processing crude bought at the height of the war in West Asia he clarified that oil companies usually purchase crude oil at least two months in advance which serves as a raw material to produce fuel. Petroleum Minister defends Centre's decision on fuel price revision Hence, the fuel currently being processed and produced was essentially bought in April or early May, at the height of the oil price hikes. Defending the Centre's decision against immediate fuel price revision, Puri said petrol prices rose just by 5.58% in India while they increased 20% in developed countries and about 35% in India's neighbouring countries during the recent oil price spike.
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