Government Reduces Losses, Keeps Petrol and Diesel Prices Unchanged

Fuel Prices Remain Stable as Government Absorbs Losses​

New Delhi – Retail prices of petrol and diesel will not be adjusted following a recent excise duty reduction, according to a statement released by the government on Friday. Instead, the government will absorb the resulting losses incurred by public sector oil marketing companies (OMCs).
The Ministry of Petroleum said the excise duty reduction of Rs 10 per litre on both petrol and diesel will offset approximately Rs 10 per litre of the under-recoveries currently being absorbed by Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation. At current international crude prices, under-recoveries stand at approximately Rs 26 per litre on petrol and Rs 81.90 per litre on diesel.
The combined daily under-recovery being absorbed by OMCs is approximately Rs 2,400 crore. This decision comes in response to a significant surge in international crude oil prices, which have risen from approximately $70 per barrel to around $122 per barrel over the past month – an increase of nearly 75 per cent in under four weeks, driven by the ongoing conflict in West Asia and associated disruptions to global energy supply chains.
Fuel prices have risen by 30 to 50 per cent across South and South-East Asian countries, 30 per cent in North America, and 20 per cent in Europe since the onset of the current crisis. India has maintained price stability, a decision the government acknowledges carries a fiscal cost.
Minister for Petroleum and Natural Gas, Hardeep Singh Puri, stated that Prime Minister Narendra Modi has decided to take a hit on government finances to safeguard Indian citizens. Alongside the excise reduction, the government has introduced an export levy on diesel to discourage exports and prioritize domestic demand.