Lok Sabha Question No. 334 (STARRED), answered on 2023-03-23
Subject: Crude Oil Price
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Dinesh Chandra Yadav, Santosh Kumar

## LOK SABHA STARRED QUESTION NO. 334 TO BE ANSWERED ON 23 MARCH, 2023

## Crude Oil Price

†*334. SHRI DINESH CHANDRA YADAV: SHRI SANTOSH KUMAR:

## पेोलयम और ाक ृतक गैस मंी

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

- (a) whether the price of crude oil in the international market has been stable for about 8-9 months and decreasing;
- (b) if so, the reasons for not providing Petrol, Diesel and Gas to public at low prices; and
- (c) the steps being taken by the Government to provide relief to the consumers?

## ANSWER

## पेोलयम और ाक ृतक गैस मंी

( ी हरदप संह पुर )

## MINISTER OF PETROLEUM AND NATURAL GAS (SHRI HARDEEP SINGH PURI)

- (a) to (c): A statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (c) of Lok Sabha Starred Question No. 334 asked  by  Shri  Dinesh  Chandra  Yadav  and  Shri  Santosh  Kumar  to  be  answered  on  23 March 2023 regarding 'Crude Oil Price'.

(a) to (c): 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. Prices of petrol and diesel have not been increased by public sector Oil Marketing Companies (OMCs) since 6 th April 2022.

Due to high volatility  and  elevated  prices  of  crude  oil,  most  of  the  developed  countries  have been reeling under high Petrol and Diesel prices. As per data compiled by PPAC, in developed countries  like  US,  the  prices  of  Petrol  and  Diesel  increased  by  about  10.8%  and  35.2% respectively over the period January 2022 to January 2023, whereas during this period, prices in India (Delhi) increased only by 1.37% and 3.40 % for Petrol and Diesel respectively. Similarly, during the same period significant increase in the prices of Petrol and Diesel has been seen in our  neighbouring  countries  such  as  Pakistan  (28%  in  Petrol  and  40%  in  Diesel),  Bangladesh (32% in Petrol and 24% in Diesel), Sri Lanka (29% in Petrol and 106% in Diesel) and in Nepal (31% in Petrol and 48% in Diesel).

The price of crude oil and petroleum products in the international markets fluctuate depending on various  factors  viz.  demand-supply,  geopolitical  factors  and  other  market  conditions.    The monthly average price of Indian Basket of Crude Oil for the last nine months are as under:

| Month          |   Indian Basket of Crude Oil ($/bbl) |
|----------------|--------------------------------------|
| June 2022      |                               116.01 |
| July 2022      |                               105.49 |
| August 2022    |                                97.4  |
| September 2022 |                                90.71 |
| October 2022   |                                91.7  |
| November 2022  |                                87.55 |
| December 2022  |                                78.1  |
| January 2023   |                                80.92 |
| February 2023  |                                82.28 |

Source: Petroleum Planning and Analysis Cell (PPAC)

Note: The crude oil price in USD/Barrel terms does not reflect the depreciation of INR/USD exchange rate.

The  Central  Government  has  reduced  Central  Excise  duty  by  a  total  of  Rs.  13/litre  and  Rs. 16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022. 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.

India  imports  more  than  60%  of  its  domestic  LPG  consumption.  Government  continues  to modulate the effective price of domestic LPG. While the Saudi Contract Prices (CP), on which domestic LPG prices are based, rose by 235 % from 236 $/MT in April 2020 to 790 $/MT in February 2023, retail selling price of domestic LPG has increased only by 89.7 % from Rs. 581.5 in May 2020 to Rs.1103 in March 2023 and effective cost for PMUY rose only by 55.2 % during the same period. Public Sector Oil Marketing Companies have suffered huge losses on sale of domestic  LPG.  To  compensate  these  losses,  the  Government  has  recently  paid  a  one-time compensation  of  Rs.  22000  crore  to  OMCs.  W.e.f.  21.05.2022,  Government  has  started  a targeted subsidy of Rs. 200 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries  for  upto  12  refills  for  year  2022-23.  The  Retail  Selling  Price  (RSP)  of  domestic LPG at  Delhi  on  21.05.2022  was  Rs.  1003  per  14.2  Kg  cylinder.  As  on  01.03.2023,  RSP  of domestic  LPG  at  Delhi  is  Rs.  1103  per  14.2  Kg  cylinder  and  effective  price  for  PMUY consumers is Rs. 903 per cylinder.