Oil Minister Hardeep Singh Puri hints at potential petrol, diesel price cut if global crude prices remain subdued
Oil Minister Hardeep Singh Puri hinted at a potential reduction in petrol and diesel prices, contingent on global crude prices continuing to stay low. He mentioned that if crude prices remain subdued, consumers could reasonably expect a fuel price cut after a year-long hiatus.
If the audience asks when fuel prices will come down further, I would say that if this trend (of low crude prices) continues, there is a reasonable expectation of a fuel price cut .” The last price reduction, which was Rs 2 per litre, occurred on March 14, just ahead of the Lok Sabha elections.
Prior to this, fuel prices had remained unchanged since May 22, 2022, when the Centre reduced excise duty for the second time since November 4, 2021.
The two cuts combined brought down the excise duty on petrol and diesel by a total of Rs 13 and Rs 16 per litre, respectively.
Following the second excise duty cut, BJP-led states implemented corresponding cuts in VAT to help mitigate the effects of rising oil prices, which had surged above $100 per barrel in the aftermath of the Ukraine conflict.
Live Events The possibility of a price reduction has been building since September last year when benchmark Brent crude prices fell below $70 per barrel, following a peak in April 2024.
Since then, prices have largely remained subdued, with only brief upticks in June and September 2024.
Currently, crude is trading in the range of $70-75 per barrel.
Despite these favorable conditions, state-run fuel retailers have not passed on the benefit of a positive marketing margin from lower crude prices to consumers, unlike their private counterparts.
Minister Accoring to TOI, Puri also highlighted the losses being incurred by state-run retailers on domestic LPG, over and above the subsidy support allocated in the Budget for the Ujjwala scheme.
With global crude prices remaining stable and subdued, the government’s expectation of a potential fuel price cut appears realistic.
However, consumers will have to wait and watch to see whether the trend continues and whether the prices at the pump will reflect this change.
