Lok Sabha Question No. 1652 (UNSTARRED), answered on 2024-08-01
Subject: Cost of Petroleum Products
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Shri Arvind Ganpat Sawant, Shri Shrirang Appa Chandu Barne, Shri Sanjay Haribhau Jadhav

## LOK SABHA UNSTARRED QUESTION NO. 1652 TO BE ANSWERED ON 01 AUGUST, 2024

## Cost of Petroleum Products

1652 Shri Arvind Ganpat Sawant:

Shri Sanjay Haribhau Jadhav:

Shri Shrirang Appa Chandu Barne:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

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

- (a) the average cost of petroleum products for every year since 2014;
- (b) the yearly percentage increase in the cost of petroleum products for every year during the last five years and the reasons for such increase;
- (c) whether the Union Government has taken any steps to control the rise and if so, the details thereof;
- (d) the steps taken by the Union Government to explore alternatives to petroleum products;
- (e) whether there is any proposal to bring the petroleum products under GST regime; and
- (f) if so, the time by which the final decision is likely to be taken in this regard and if not, the reasons therefor?

## 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.

India  imports  more  than  85%  of  its  crude  oil  requirements.  Crude  oil  prices  (Indian  basket) increased from $59.35/bbl (August 2019)  to $112.87/bbl (March  2022)  and further to $116.01/bbl  (June  2022)  and  have  continued  to  remain  highly  volatile  during  current  year.  In current  year,  it  fluctuated  from  $84.49/bbl  in  March  2024  to  $89.46/bbl  in  April  2024  and  to $85.89/bbl in July 2024 (upto 19.07.2024).

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

Central Government 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, which was fully passed on to consumers. Some State Governments also reduced state VAT rates to provide relief to citizens. In March, 2024, OMCs also reduced the retail prices of petrol and diesel by Rs. 2 per litre  each  and  current  RSP  of  petrol  and  diesel  at  Delhi  is  Rs.  94.72  and  Rs.  87.62  per  litre respectively

India imports more than 60% of its domestic LPG consumption. Prices of LPG in the country are linked to its price in the international market. Government continues to modulate the effective price to consumer for domestic LPG. During the period 2020-21 to 2022-23, the average Saudi CP  (international  benchmark  for  LPG  pricing)  went  up  from  $415  per  MT  to  $712  per  MT. However, the increase in the international prices was not fully passed on to the customers.

Under PAHAL Scheme, the domestic LPG cylinders are sold at non-subsidised price and the applicable subsidy to the consumers is transferred directly into their bank accounts. Apart from the direct subsidy to consumers, the OMCs have also been compensated Rs 22,000 crore in FY 2022-23 by Government of India to cover the under-recoveries suffered by them in not passing on the high international LPG prices to the domestic LPG consumers.

Government reduced the retail selling price of domestic LPG for all consumers by Rs. 200 per 14.2 Kg LPG cylinder with effect from 30 th August, 2023. Government further reduced the RSP of domestic LPG by Rs. 100 per 14.2 Kg cylinder w.e.f. 9 th March, 2024. The current RSP of domestic LPG at Delhi is Rs. 803 per 14.2 Kg cylinder.

W.e.f. 21 st May, 2022, Government has been providing a targeted subsidy of Rs. 200 per 14.2 Kg LPG cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for upto 12 refills a year. Moreover, w.e.f.  5 th October, 2023, Government increased the targeted subsidy to Rs. 300 per 14.2 Kg LPG cylinder for all Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries. With a targeted  subsidy  of  Rs.  300  per  cylinder  (and  proportionately  prorated  for  5  Kg  cylinder), effective cost for PMUY consumers is Rs. 503 per 14.2 Kg cylinder (at Delhi) currently.

Government is committed towards security, affordability and accessibility of energy for every citizen. To achieve these objectives Government is promoting usage of alternate fuels like CNG, LNG, Hydrogen, biofuels, electric vehicles, etc.

Government has notified the National Policy on Biofuels - 2018 which laid out indicative target of  20%  blending  of  ethanol  in  petrol  and  5%  blending  of  biodiesel  in  diesel  by  2030  in  the country. Subsequently, Government has advanced the target of 20% blending of ethanol in petrol from  2030  to  2025-26.  To  promote  the  use  of  biofuels,  various  programmes  such  as  Ethanol Blended  Petrol  (EBP)  Programme,  wherein  Oil  Marketing  Companies  (OMCs)  sell  petrol blended with ethanol, Biodiesel blending programme wherein biodiesel is blended with diesel, Sustainable Alternative towards Affordable Transportation (SATAT) initiative wherein Compressed Bio Gas (CBG) is marketed along with Compressed Natural Gas (CNG) have been taken up. For Biofuel production across the country including rural India, the Government has taken  steps  on  pricing,  incentives,  opened  alternate  route  for  ethanol  production,  notified Pradhan Mantri JI-VAN Yojana for setting up second generation ethanol bio-refineries based on agri residues for ethanol production, SATAT initiative for production of CBG and bio-manure from various waste / biomass sources, notified interest subvention scheme for enhancement and expansion of ethanol distillation capacity etc.

The average Retail Selling Prices (RSP) of petrol, diesel and domestic LPG at Delhi since 201415 are given at Annexure.

(e) & (f): Article 279 A (5) of the Constitution prescribes that the Goods and Service Tax Council shall recommend the date on which the goods and services tax be levied on High Speed Diesel, Motor Spirit (Petrol). Also, as per the section 9(2) of the CGST Act, inclusion of these products in GST will require recommendation of the GST Council. So far, the GST Council, in which all the states  are  represented, has not made any recommendation for inclusion of these goods under GST.

x-x-x-x-x

Annexure referred to in reply to Lok Sabha Unstarred Question No. 1652 asked by Shri Arvind Ganpat Sawant, Shri Sanjay Haribhau Jadhav and Shri Shrirang Appa Chandu Barne to be answered on 01.08.2024 regarding 'Cost of Petroleum Products'.

Average Retail Selling Prices (RSP) of petrol, diesel and domestic LPG at Delhi

| FY                        |   Average RSP of Petrol (Rs./Litre) |   Average RSP of Diesel (Rs./Litre) | Average RSP of Domestic LPG (Rs./14.2 Kg cylinder)   |
|---------------------------|-------------------------------------|-------------------------------------|------------------------------------------------------|
| 2014-15                   |                               66.37 |                               53.38 | 832.57                                               |
| 2015-16                   |                               61.59 |                               47.01 | 586.09                                               |
| 2016-17                   |                               64.61 |                               53.24 | 554.17                                               |
| 2017-18                   |                               69.2  |                               58.78 | 657.41                                               |
| 2018-19                   |                               75.37 |                               68.22 | 754.33                                               |
| 2019-20                   |                               72.69 |                               65.78 | 688.03                                               |
| 2020-21                   |                               80.84 |                               73.58 | 650.80                                               |
| 2021-22                   |                               98.05 |                               87.42 | 866.85                                               |
| 2022-23                   |                               97.9  |                               90.58 | 1,038.70                                             |
| 2023-24                   |                               96.63 |                               89.53 | 979.23                                               |
| 2024-25 (Till 25.07.2024) |                               94.72 |                               87.62 | 803.00*                                              |

Source: Petroleum Planning & Analysis Cell (PPAC)

*Subsidy of Rs. 300 per 14.2 Kg domestic LPG cylinder is given to PMUY beneficiaries, upto 12 cylinders per annum