Oil marketing companies have incurred losses of Rs 74,781 crore after selling petrol, diesel and LPG below cost for the period up to June 30 when global crude oil prices spiked in the wake of the West Asia conflict, Union Oil Minister Hardeep Singh Puri said, underlining the financial strain faced by the sector amid volatile global energy markets.
Puri explained that while international oil prices have eased in recent weeks, companies are still processing crude that was purchased at elevated rates during the peak of the West Asia crisis. Oil companies typically buy crude oil — the raw material for producing fuel — at least two months in advance. So, crude oil that is being processed now is essentially what was bought in April or early May when international prices were very high.
On the possibility of a price cut, the minister said it would be a “legitimate question” if global oil prices remain low for the next few weeks, indicating that any relief at the pump would depend on sustained stability in international markets. He also noted that the government has been focused on ensuring domestic supply stability and securing energy sources, amid ongoing global uncertainties affecting fuel availability and pricing.
Crude oil prices started coming down only in the second half of June after the US and Iran reached an agreement to end the conflict.
India has lowered windfall taxes on exports of diesel and aviation turbine fuel, while raising the duty on petrol exports. The duty on diesel exports has been cut to 8.5 rupees per litre from 14 rupees, while the aviation turbine fuel duty has been set at 7.5 rupees/litre, down from 12.5 rupees. The export duty on petrol has been increased to 4 rupees per litre from 1.5 rupees to ensure domestic supply.
Notably, the ministry said that there is no change in the current excise duty rates on petrol and diesel meant for domestic consumption, ensuring that local retail prices remain unaffected.
Also, the central government has lifted restrictions on the sale of petrol and diesel from July 1. The government had imposed the restrictions earlier this month amid disruptions to global supply chains due to the US-Iran war.
Oil Firms Suffer Rs 74,781 Crore Loss; Petrol, Diesel Price Cut Likely If Global Oil Rates Stay Low: Puri
