New Delhi: Fuel retailers are losing ground $20 per liter of gasoline $The price of diesel has reached 100 liters as state-run companies continue to protect consumers from oil price fluctuations by suspending pumping prices, an oil ministry official said on Thursday.
Such volatility may not be sustainable for oil refiners if the West Asia crisis is prolonged and global oil prices remain above $70-80 per barrel, said sector experts and industry executives, speaking on condition of anonymity.
They expect oil companies to partially pass on their petrol and diesel revenue losses to consumers sometime after the Assembly elections – the final round of voting in the ongoing assembly polls in the state on April 29 – if global oil prices continue to fluctuate. The price of benchmark Brent crude, which was at $72.87 a barrel before the outbreak of war in West Asia, rose nearly 40% to $101.91 a barrel on Wednesday. It was hovering above $103 on Thursday.
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Refuting what was circulated on social media about the possibility of raising gasoline and diesel prices $“We hereby make it clear that there is no such proposal under study by the government,” the Petroleum Ministry said in a statement dated 25-28 L after the council elections. She said in a post on the X website: “Such news aims to create fear and panic among citizens and is harmful and misleading.”
On paper, gasoline and diesel are unregulated fuels, but the government often regulates their prices through the three oil marketing companies (OMCs) for economic and political reasons. State-run IOCs BPCL and HPCL enjoy a near-monopoly in domestic fuel retail with a market share of about 90%.
Giving a daily update on the country’s fuel supply situation amid the ongoing West Asia crisis, Oil Ministry Joint Secretary Sujata Sharma said that with the average price of crude oil rising from about $70 per barrel a year ago to about $113 per barrel this month, oil management companies are incurring a shortfall in recovery. $20 liters of gasoline and $100 liters on diesel which fluctuates every day.
To be sure, the shortfall in recovery of petrol and diesel does not constitute actual losses, but rather a hypothetical loss of revenue compared to the market prices prevailing on a particular day. In other words, if the government is to allow companies to sell fuel at market-determined prices, gasoline and diesel must be sold at lower prices. $114.77 per liter and $187.67 liters in Delhi.
State-run retailers sell them at a price $94.77 per liter and $87.67 per liter respectively during the past two years. Motor fuel prices have remained fairly constant since mid-March 2024 except for a marginal increase of five pennies on October 30, 2024 due to marketing cost adjustments. India imports 88% of the crude oil it processes. In the oil refining business, about 90% of costs are related to crude oil.
In order to partially compensate oil and gas companies for their revenue losses and to protect customers from any rise in motor fuel prices, the government reduced customs duties on gasoline and diesel by $10 per liter about a month ago.
At the same time, it imposed duties on exports of diesel and jet turbine fuel, in a measure to prevent the diversion of domestic fuel supplies abroad.
