According to Minister for Petroleum and Natural Gas Hardeep Singh Puri’s written response to the Lok Sabha on Thursday, the costs of gasoline and diesel are tied to their prices on the international market because our nation imports more than 85% of its crude oil requirements.
The fact that the VAT on petroleum products has not been reduced in West Bengal, Tamil Nadu, Andhra Pradesh, Telengana, Kerala, or Jharkhand has led to higher prices for gasoline and diesel in those states.
Puri asserts that in response to cues (VAT), the central government has lowered the excise rate for petroleum products and that some states have lowered their value-added taxes.
The minister pointed out that fuel retail pricing is affected by a number of factors, including the price of crude oil, the currency rate, shipping costs, inland freight, refinery margin, dealer commission, central taxes, state VAT, and other cost components.
He further expressed that from November 2020 and November 2022, the normal cost of the Indian unrefined petroleum container moved by 102%, going from USD 43.34 to USD 87.55.
However, retail prices for gasoline and diesel in India only increased by 18.95 percent and 26.5 percent, respectively, between November 2020 and November 2022.
Puri provided the following list of rates in Indian rupees for other nations when comparing the increases in fuel prices per liter: in October 2022, the cost of fuel in the USA was 83.00 and that of diesel was 113.38; The prices were 152.41 and 171.35 respectively in the United Kingdom.
In addition, public sector Oil Marketing Companies (OMCs) have not raised gasoline and diesel prices since April 6, 2022. This is despite record-high international prices, which resulted in a combined “Profit Before Tax” of Rs 28,360 crore in the first quarter of the fiscal year 2021–22. In contrast, the three OMCs—IOCL, BPCL, and HPCL—have reported a combined loss of Rs 27,276 crore in the first quarter of the fiscal year 2022–23.
India imports more than 60% of its domestic consumption of liquefied petroleum gas (LPG) at rates based on the Saudi Contract Price (CP). However, Saudi CP increased to 952 USD/MT in April 2022 from 236 USD/MT in April 2020.
