Rising gasoline and diesel prices are unlikely to happen soon. here’s why
The Russian-Ukrainian war threatened to drive up global oil prices, which could have led to a massive increase in gasoline and diesel prices in India. Things have since changed for the better.
Commuters bracing for a major rise in gasoline and diesel prices can breathe easy, at least for a while. As international oil prices fell below $100 on Tuesday, the chances of an immediate rise in fuel prices seem unlikely. The Center said it was closely monitoring the ongoing Russian-Ukrainian war and its fallout to carry out “calibrated interventions” to control gasoline and diesel prices.
Fear of a massive rise in gasoline and diesel prices became all but inevitable after Brent crude oil prices hit a 14-year high of $139 a barrel last week. With no sign of an immediate ceasefire, international oil prices had skyrocketed since Russia invaded Ukraine. Later, when the world’s largest oil importer, China, signaled the resurgence of Covid-19, there were also concerns about the major impact on oil demand.
India, the world’s third-largest crude oil importer, has prepared for the impact of the fallout. India is heavily dependent on oil imports to meet around 85% of demand in domestic markets. Reports suggested a trek between ₹10 and ₹15 per liter on petrol and diesel. Indian oil companies lost about ₹12-13 per litre, without taking into account the marketing margin, on the sale of petrol and diesel during this period.
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Although the cost of raw materials increased by more than 60%, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) did not change the prices of gasoline and diesel for a record 131 days. They were expected to revise the prices after assembly elections ended in five states earlier this month.
On Monday, Petroleum Minister Hardeep Singh Puri said, “Oil marketing companies will make their decisions (on fuel prices). They will proceed once they can’t take it anymore. If they don’t have the margin or the cushion, they will take the appropriate step. »
Minister of State for Finance Pankaj Chaudhary said: “The government is closely monitoring these factors and evolving geopolitical developments and would make calibrated interventions as and when required to safeguard the interests of the common man. .”
The Center had reduced excise duties on petrol and diesel in November last year. The excise duty on petrol has been reduced by ₹5 per liter per ₹10 on diesel to provide relief after prices hit record high. Several state governments have also reduced VAT on fuel prices to further relieve consumers.
Date of first publication: March 16, 2022, 12:19 PM IST