Lok Sabha Question No. 5325 (UNSTARRED), answered on 2025-04-03
Subject: Price of Petroleum Products
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Dr. Ganapathy Rajkumar P

## LOK SABHA UNSTARRED QUESTION NO. 5325 TO BE ANSWERED ON 03 APRIL, 2025

## Price of Petroleum Products

5325. Dr. Ganapathy Rajkumar P:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

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

- (a) whether there is a huge difference between the procurement rate of crude oil and the selling price of petroleum products in the country;
- (b) if so, the reasons therefor;
- (c) whether the profit earned from petroleum products is being used for making payment against petroleum bonds issued during the UPA Government; and
- (d)  if  so,  the  amount  settled  so  far  on  petroleum  bonds  and  the  existing  burden  of  petroleum bonds?

## ANSWER पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũालय मŐ राǛ मंũी ( ŵी सुरे श गोपी )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI SURESH GOPI)

(a) to (d): Prices  of  petrol  and  diesel  are  market  determined  and  Public  Sector  Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel.

The prices of petroleum products in the country are linked to the price of respective products in the international market. India imports more than 85% of its crude oil requirements. Crude oil prices  (Indian  basket)  increased  from  $55/bbl  (March  2015)  to  $113/bbl  (March  2022)  and further to $116/bbl (June 2022) and have continued to fluctuate due to various geopolitical and market factors.

Domestically,  Petrol  and  Diesel  prices  have  come  down  to  Rs.  94.77  and  Rs.  87.67  per  litre respectively  (Delhi  prices) as  a result  of  various  steps  taken  by  Government  and  PSU  OMCs, Central Excise duty was reduced by the Central Government 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, which was fully passed on to consumers. Some State Governments also reduced state VAT rates to provide relief to citizens. In March, 2024, OMCs reduced the retail prices of petrol and diesel by Rs. 2 per litre each.

PSU OMCs have recently carried out an intra-state freight rationalisation.  This  has  benefitted consumers located at remote areas, far from Petroleum Oil & Lubricants (POL) Depots in the form of reduced Petrol and Diesel prices in remote parts within the states. This initiative has also reduced  the  difference  between  the  maximum  and  minimum  retail  prices  of  Petrol  or  Diesel within a state.

Government also took several other steps to insulate common citizens from high international prices, which included diversifying the crude import basket, invoking the provisions of Universal Service Obligation to ensure availability of petrol & diesel in domestic market, increasing the blending of ethanol in petrol, etc.

India has been the only major economy in the world where the prices of petrol and diesel have come down in recent  years.  Changes  in  prices  of  petrol  and  diesel  in  some  major  economies between November 2021 and January 2025 are as under:

|               | %age Change in Prices between Nov-21 and Jan-25   | %age Change in Prices between Nov-21 and Jan-25   |
|---------------|---------------------------------------------------|---------------------------------------------------|
| Country       | Petrol                                            | Diesel                                            |
| India (Delhi) | -13.60%                                           | -10.92%                                           |
| France        | 14.21%                                            | 15.08%                                            |
| Germany       | 7.87%                                             | 12.43%                                            |
| Italy         | 8.65%                                             | 11.39%                                            |
| Spain         | 8.67%                                             | 12.93%                                            |
| UK            | 0.08%                                             | 2.61%                                             |
| Canada        | 10.52%                                            | 23.05%                                            |
| USA           | 4.83%                                             | 12.86%                                            |

Source: Petroleum Planning and Analysis Cell (PPAC)

Changes in prices of petrol and diesel in some neighboring economies between November 2021 and January 2025

|               | %age Change in Prices between Nov-21 and Jan-25   | %age Change in Prices between Nov-21 and Jan-25   |
|---------------|---------------------------------------------------|---------------------------------------------------|
| Country       | Petrol                                            | Diesel                                            |
| India (Delhi) | -13.60%                                           | -10.92%                                           |
| Pakistan      | 29.76%                                            | 34.97%                                            |
| Bangladesh    | 13.94%                                            | 30.82%                                            |
| Sri Lanka     | 53.98%                                            | 101.59%                                           |
| Nepal         | 22.02%                                            | 31.32%                                            |

Source: Petroleum Planning and Analysis Cell (PPAC)

India imports about 60% of the domestic LPG consumed. Price of LPG in the country is linked to its price in the international market. While the average Saudi CP (international benchmark for LPG pricing) rose by 63% (from US$ 385/MT in July 2023 to US$ 629/MT in February 2025), the  effective  price  for  Pradhan  Mantri  Ujjwala  Yojana (PMUY) consumers for domestic  LPG was reduced by 44% (from Rs. 903 in August 2023 to Rs. 503 in February 2025).

The retail selling price of a 14.2 Kg domestic LPG cylinder is currently Rs. 803 in Delhi. After a targeted  subsidy  of  Rs.  300/cylinder  to  PMUY  consumers,  Government  of  India  is  providing 14.2 Kg LPG cylinders at an effective price of Rs.503 per cylinder (in Delhi). This is available to more than 10.33 crore Ujjwala beneficiaries, across the country.

Globally, PMUY is the biggest program of its kind that provides Domestic LPG to more than 10 crore poor households at an effective price of just about Rs. 35/Kg. Further, the effective price of domestic LPG cylinder in neighbouring countries as on 01.01.2025 is as below:

| Country   | Domestic LPG (Rs./14.2 kg.cyl.)   |
|-----------|-----------------------------------|
| India     | 503.00*                           |
| Pakistan  | 1094.83                           |
| Sri Lanka | 1231.53                           |
| Nepal     | 1206.65                           |

Source: Petroleum Planning and Analysis Cell (PPAC)

The revenue generated by taxation is used in various infrastructural projects and developmental schemes of the Government like Targeted subsidy to PMUY households, Pradhan Mantri Gram Sadak Yojana (PMGSY), Pradhan Mantri Ujjwala Yojana (PMUY), Ayushman Bharat, Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), free vaccination for COVID - 19 etc. Oil bonds were issued by the Government during the period 2005-06 to 2009-10.   As informed by  the  Ministry  of  Finance,  the  amount  settled  till  26.03.2025  on  petroleum  bonds  is  Rs.

131550.01 crore and the existing burden of petroleum bonds is Rs.38969.92 crore.

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