Lok Sabha Question No. 1733 (UNSTARRED), answered on 2024-12-05
Subject: Reduction in Petrol and Diesel Prices
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Adv K. Francis George

## LOK SABHA UNSTARRED QUESTION NO. 1733

## TO BE ANSWERED ON 05 DECEMBER, 2024

## Reduction in Petrol and Diesel Prices

1733 Adv K. Francis George:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

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

- (a) the rationale provided by the Government for the reduction of Rs. 2 per litre in petrol and diesel prices, effective from 15th March 2024 and the objectives intended to be achieved through this decision;
- (b)  whether  the  Government has assessed the economic impact of this reduction on consumer spending and vehicle operating costs, particularly considering its implications for around 58 lakh heavy  goods  vehicles,  6  crore  cars  and  27  crore  two-wheelers  in  India  and  if  so,  the  details thereof;
- (c) the specific measures taken by the Government to stabilize fuel prices amidst global market fluctuations and the outcomes achieved through these measures during the last two years and the current year; and
- (d) whether the Government is considering further reductions in the prices of petrol, diesel, or LPG to provide additional relief to consumers in light of ongoing inflationary pressures and if so, the details thereof?

## 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.

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, including reduction of Central Excise duty 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. This reduction  has  assisted  citizens  through  higher  disposable  income,  lower  costs  and  increased consumer spending. No impact assessment study has so far been carried out by the Ministry in this regard.

Government  of  India  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.

Recently  PSU  OMCs  have  carried  out  intra-state  freight  rationalisation.  This  has  benefitted consumers located at remote areas, far from Petroleum Oil & Lubricants (POL) Depots in 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.

India imports about 60% of the domestic LPG consumed. Price of LPG in the country is linked to its price in the international market. Government continues to modulate the effective price to consumer for domestic LPG. Average Saudi CP (international benchmark for LPG pricing) rose by 64% (from US$ 385/MT in July 2023 to US$ 632 /MT in November 2024) while on the other hand effective price for Pradhan Mantri Ujjawala Yojana (PMUY) consumers for domestic LPG reduced in India by 44% (from Rs. 903 in August 2023 to Rs. 503 in November 2024).

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. A few State Governments are providing  some  additional  subsidy  on  LPG  refills  and  bear  the  additional  cost  from  their respective budgets.