Lok Sabha Question No. 2642 (UNSTARRED), answered on 2022-03-17
Subject: Increased Fuel Cost
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Dayanidhi Maran

## LOK SABHA UNSTARRED QUESTION NO. 2642 TO BE ANSWERED ON 17 th March, 2022

## INCREASED FUEL COST

## 2642: SHRI DAYANIDHI MARAN :

## पैोलयम और ाक ृ तक गैस मंी

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

- (a) the  steps  taken  by  the  Government  to  insulate  Indian  consumers  from increased  fuel  costs  due  to  the  increasing  cost  of  crude  oil  and  RussiaUkraine war;
- (b) the  steps  taken/being  taken  by  the  Government  to  protect  the  Indian  fuel market from the ripple effects of the Russia-Ukraine war; and
- (c) whether  the  Government  has  taken  any  steps  or  methods  to  absorb  the increase in fuel costs or provide subsidies to shield Indian Consumers from the price rise due to the global situation and if so, the details thereof?

## ANSWER

## पैोलयम और ाक ृ तक गैस मंालय म राय मंी ( ी रामेवर तेल )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI RAMESWAR TELI)

(a)to(c): The geopolitical situation between Russia and Ukraine has resulted in steep increase in global crude oil and gas prices.  Government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall-out of the evolving geopolitical situation.  In November 2021,  in  a  bid  to  control  inflationary  pressures,  Government  of  India,  in consultation  and  parallelly  with  major  energy  consumers,  had  agreed  to release 5 million barrels from its Strategic Petroleum Reserves.

Government of India is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices.

Further,  to  ensure  security  of  crude  supplies  and  to  mitigate  the  risk  of dependence on crude oil from single region, Oil Public Sector Undertakings (PSUs) have diversified its petroleum basket and are procuring crude from countries located at various geographical locations viz. Middle East, Africa, North America, South America etc. Prices  of  petrol  and  diesel  have  been  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  their  international  product  prices,  exchange rate,  tax  structure,  inland  freight  and  other  cost  elements.  The  prices  of petroleum  products  in  the  country  are  linked  to  the  price  of  respective products in the international market. The  Central  Government  reduced  the  Central  Excise  duty  on  petrol  and diesel by Rs. 5 and Rs. 10 per litre respectively effective from 4 November, 2021. The measure was aimed to give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes. Many States/UTs have also reduced the VAT on petrol and diesel subsequently. Prices  of  LPG in the  country  are  based  on  Saudi  Contract  Price  (CP),  the risen approximately 228% from April, 2020 to February, 2022 (236 USD/MT to 775  USD/MT).  However, for  domestic  LPG  the  Government  continues  to modulate the effective price to consumers to insulate the common man from benchmark for international prices of LPG. Saudi CP has rise in international prices.

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