Lok Sabha Question No. 636 (UNSTARRED), answered on 2024-07-25
Subject: Drop in price of Crude Oil
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Smt. Mala Roy, Shri Vijayakumar Alias Vijay Vasanth, Shri T R Baalu

## LOK SABHA UNSTARRED QUESTION NO. 636

## TO BE ANSWERED ON 25 JULY, 2024

## Drop in price of Crude Oil

636. Smt. Mala Roy:

Shri Vijayakumar Alias Vijay Vasanth:

Shri T R Baalu:

## पेट Ō ोिलयम और Ůाक ृ ितक गैस मंũी

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

- (a) whether the Government is aware that the retail selling price of Petrol and high-speed Diesel are hovering at a high level in comparison to neighbouring countries for months together and the benefit  of  considerable  decrease  in  the  price  in  the  international  market  are  not  passed  on  to consumers, if so, the details thereof and the reaction of the Government thereto;
- (b) the reasons for not providing Petrol and Diesel at low price to the public; and
- (c) the details of policy of the Government on pricing of Petrol and Diesel?

## 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 (c): 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.

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 April 2024 are as under:

|               | %age Change in Prices between Nov-21 and April-24   | %age Change in Prices between Nov-21 and April-24   |
|---------------|-----------------------------------------------------|-----------------------------------------------------|
| Country       | Petrol                                              | Diesel                                              |
| India (Delhi) | -13.65                                              | -10.97                                              |
| France        | 22.19                                               | 20.17                                               |
| Germany       | 15.28                                               | 16.47                                               |
| Italy         | 14.82                                               | 17.38                                               |
| Spain         | 16.58                                               | 18.14                                               |
| UK            | 5.79                                                | 9.56                                                |
| Canada        | 22.07                                               | 22.24                                               |
| USA           | 19.08                                               | 20.25                                               |

Source: Petroleum Planning and Analysis Cell

Changes in prices of petrol and diesel in some neighbouring economies between November 2021 and April 2024

|               | %age Change in Prices between Nov-21 and April-24   | %age Change in Prices between Nov-21 and April-24   |
|---------------|-----------------------------------------------------|-----------------------------------------------------|
| Country       | Petrol                                              | Diesel                                              |
| India (Delhi) | -13.65                                              | -10.97                                              |
| Pakistan      | 44.98                                               | 43.65                                               |
| Bangladesh    | 22.01                                               | 40.24                                               |
| Sri Lanka     | 75.54                                               | 142.91                                              |
| Nepal         | 31.08                                               | 35.70                                               |

Source: Petroleum Planning and Analysis Cell

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.  Current  RSP  of  petrol  and  diesel  at  Delhi  is  Rs.  94.72  and  Rs.  87.62  per  litre respectively.