Cheaper Crude Won’t Lower Petrol-Diesel Prices Right Away, Says Government

Prices of crude oil have come down in the international market following the agreement between the USA and Iran. Everyone expects a reduction in prices of petrol, diesel, and gas. However, Minister of State for Petroleum, Natural Gas, and Tourism, Suresh Gopi stated on Thursday that even if there is a fall in prices of crude in the international market, there may not be a reduction in the price of petrol and diesel in India.

He explained that domestic fuel prices are influenced by several factors, including the time it takes for crude oil-purchased at lower rates-to reach India. Speaking to reporters about recent fuel price hikes, Gopi noted that while there was an increase of ₹3.94 per liter, it cannot be immediately rolled back simply because international crude oil prices have dropped. He said, "It will take time because the cheaper crude oil has to be transported to India via the Strait of Hormuz, an area with heavy shipping traffic. Therefore, it will take time for the situation to normalize."

Gopi stated that the volatility in the global energy market following the conflict in West Asia earlier this year significantly impacted Oil Marketing Companies (OMCs). The government absorbed a large portion of the burden caused by high crude oil prices to prevent the full impact from falling on consumers. He said, "The government incurred a loss of ₹12,000 crore by shouldering this burden itself. No state reduced its revenue by cutting duties on high fuel prices. The central government has to function, and oil companies also need to remain viable."