Page 11 - AsianOil Week 04 2023

AsianOil POLICY AsianOil

Indian oil firms urged to keep fuel prices low

INDIA INDIAN Minister of Petroleum and Natural Gas petrol and INR27.7 ($0.34) on a litre of diesel.
Hardeep Singh Puri has urged the nation’s oil In comments local sources have since said
Indian oil firms should companies to consider a reduction in fuel prices were targeted primarily at Bharat Petroleum
cut fuel prices as long as long as prices of crude on international mar- Corporation Ltd (BPCL), Hindustan Petroleum
as crude oil remains kets remain under control, and losses incurred Corporation Ltd (HPCL) and Indian Oil Corpo-
cheap. during 2022 can be recovered. ration (IOC), Puri’s request to see prices reduced
Speaking at a press conference in the histor- further once 2022-incurred losses are recovered
ical northern city of Varanasi, the minister first is yet to be acted upon.
praised Indian oil companies for maintaining Between them, BPCL, HPCL and IOC con-
prices at current levels since late 2021, despite trol in the region of 90% of India’s domestic
fluctuations in global markets. petroleum market in a nation reliant on imports
“I request (of) the oil companies that if the for 85% of its crude supply.
international oil prices are (under) control and On the plus side for consumers at least, prices
(are) recovering, their companies have (to) stop, of fuel supplied by each of the three big retailers
then reduce the oil prices in India also.” have remained unchanged since early April last
In other comments made by the minister at year.
the same event, he praised India’s leading three This is despite an increase in crude prices of
oil firms for not passing on increases in global $13.04 per barrel later that same month up until
oil prices, even as global markets reeled in the June of 2022.
immediate aftermath of Russia’s invasion of Prices only came back down to around $82
Ukraine last February. per barrel earlier this year.
“We didn't ask them to hold prices. They did As such, daily amendments of prices at the
it on their own,” the minister said. pump published in media and at service stations
Puri did not allow the oil companies to take remain suspended, and have been since Novem-
all the credit for stability in petrol and diesel ber 2021, when oil prices in India first started to
prices across the subcontinent over the past year, break records as a result of pandemic woes.
though. Lower prices at present, though, are allowing
"One reason for keeping prices of petrol and the companies to recoup losses incurred during
diesel under check is the reduction in taxes. the April to September 2022 period, soon after
The central government revised the taxes twice prices hit a 14-year high in the wake of Russian
between November 2021 and May 2022,” Puri aggression in Ukraine.
pointed out. With prices at the time approaching $140
“Prices of petrol and diesel have not been per barrel, only limited demand from China
revised since May 22, 2022, when the Finance throughout the summer months prevented
Ministry cut Central Excise duty followed by global prices rising further.
a reduction in sales tax by many states,” he For now, millions across India are waiting to
added. see how the big three respond to predicted oil
The month after the most recent tax cuts, prices of $80-95 over the next 12 months, and
however, saw oil companies in India absorb whether or not they will follow Puri’s request to
record losses of INR17.4 ($0.21) per litre on cut prices for end-users. ™

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