Lok Sabha Question No. 1222 (UNSTARRED), answered on 2020-09-19
Subject: Steps to Reduce Prices of Petrol/Diesel
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Mala Roy, Nama Nageswara Rao, S. Jothimani

## LOK SABHA

## UNSTARRED QUESTION NO.1222 TO BE ANSWERED ON 19 TH  SEPTEMBER, 2020

## Steps to Reduce Prices of Petrol/Diesel

1222.   SHRIMATI MALA ROY: SHRI NAMA NAGESWARA RAO:

MS. S. JOTHIMANI:

## पेोलयम और ाक ृ तक गैस मंी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

(a) the details of monthly price of crude oil and selling price of petrol during the last three years;

(b)  whether  the  countries  like  Bangladesh,  Sri  Lanka,  Nepal,  Bhutan  and  Pakistan  are maintaining  low  rates  of  petrol/diesel,  if  so,  the  analysis  thereof  including  the  reasons  for high price of petrol/diesel in India despite their price being cheap in international market;

(c) the details of quantum of profit earned by Oil Marketing Company due to cheap price of petrol/diesel in international market;

(d) ) whether the Government has taken any steps to reduce the price of petrol and diesel by reducing taxes/excise duty or by other means, if so, the details thereof during the last three years and if not, the reasons therefor;

(e) the details of profits generated from selling petrol and diesel to dealers monthly during the last three years including the amount received by the Government through taxes on petroleum products during the last three years and current year along with the details of usage of funds from the profit generated during the last three years; and

(f)  whether  the  Government  has  discontinued  the  LPG  subsidy  scheme,  if  so,  the  details thereof  along  with  the  steps  taken/being  taken  for  giving  subsidy  on  diesel  for  agriculture purpose?

## ANSWER

## पेोलयम और ाक ृ तक गैस मंी ( ी धम धान )

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

- (a) The details of monthly price of Indian Basket of crude oil and retail selling prices of petrol/diesel  during  the  last  three  years  are  available  at  the  website  of  Petroleum Planning and Analysis Cell (PPAC) i.e. www.ppac.gov.in.
- (b) Prices  of  petrol  and  diesel  have  been  made  market-determined  with  effect  from 26.06.2010 and 19.10.2014 respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with  international  product  prices  and  other market conditions.  The  OMCs  have  not only increased but also decreased the prices of petrol and diesel in line with changes in international prices and rupee dollar exchange rate.

The prices of petrol and diesel in the country are benchmarked to their international product  prices.  Generally,  the  prices  of  petroleum  products  in  the  country  are higher/lower  than  other  countries  due  to  various  factors,  including  prevailing  tax regime  and  subsidy  compensations  by  the  respective  Governments,  the  details  of which are not maintained by the Government.

- (c) The details of profit after tax earned by Oil Marketing Company from all activities during the last three years and current year is given as under:

(Rs. Crore)

| Companies   | 2017-18   | 2018-19   | 2019-20   | Q1-2020-21   |
|-------------|-----------|-----------|-----------|--------------|
| IOC         | 21,346    | 16,894    | 1,313     | 1,911        |
| HPC         | 6,357     | 6,029     | 2,637     | 2,814        |
| BPC         | 7,919     | 7,132     | 2,683     | 2,076        |

- (d) With an aim to reduce the prices of petrol and diesel and give relief to the consumers, the Central Government reduced the Central Excise duty on petrol and diesel by Rs. 2 per litre with effect from 4th October, 2017. The Central Government further reduced the Central Excise duty on petrol and diesel by Rs. 1.5 per litre with effect from 5th October, 2018 and Public Sector OMCs also reduced Rs. 1.00 per litre to reduce the overall price of petrol and diesel. The Central Government also requested the State Governments to make a reduction of Rs. 2.50 per litre in VAT imposed by them on petrol and diesel. 18 State Governments and 1 Union Territory had reduced VAT on petrol and diesel.
- (e) The details of profit after tax earned by Oil Marketing Company from all the activities during the last three years and current year is given in part (c) above. The details of revenue  from  central  excise  duty  collected  on  petrol,  high  speed  diesel  oil  and aviation turbine fuel (ATF) is as under:

(Value in Rs. Crores)

| Commodity         |   2017-18 |   2018-19 |   2019-20 | 2020-21 (Apr-Aug)   |
|-------------------|-----------|-----------|-----------|---------------------|
| Petrol            |     74431 |     68929 |     83219 | 31160               |
| High Speed Diesel |    150836 |    144471 |    132242 | 72148               |
| ATF               |      1938 |      2540 |      2002 | 128                 |
| Natural Gas       |      1059 |      1547 |      1614 | 343                 |
| Cess on crude oil |     13579 |     17814 |     13887 | 1026*               |

Source: DG-Systems-CBIC/PrCCA; *: extrapolated from Apr-July data

The total Contribution to Central and State exchequer by the petroleum sector during the last three years and current year is given below:

(Rs. Crore)

| Particulars                                         | 2017-18   | 2018-19   | 2019-20   | Q1-2020-21 (P)   |
|-----------------------------------------------------|-----------|-----------|-----------|------------------|
| Total Contribution of Petroleum Sector to Exchequer | 5,43,026  | 5,75,632  | 5,55,370  | 81,921           |

Based on 16 major oil & gas companies

- (f) No sir.  The Government continues to modulate the effective price to consumer for Subsidized Domestic  LPG.  As  Government  is  modulating  the  retail  price of subsidized domestic LPG, the subsidy on these products increase/ decrease with the

corresponding  increase/  decrease  in  the  prices  of  these  products  in  international market.

Further, price of diesel has been made market-determined effective 19.10.2014. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on  pricing  of  Diesel  in  line  with  international  product  price  and  other  market conditions.