Amid geopolitical unrest in the Middle East, crude oil prices have surged in the international market. It has increased from $70 per barrel to $126. But petrol and diesel prices in the domestic market have remained stable. In such a situation, the losses of state-owned oil companies are increasing. Some part of this burden may have to be borne by consumers. According to a source, petrol and diesel prices may increase in India before May 15.
Sujata Sharma, Joint Secretary, Ministry of Petroleum, said that due to the increase in crude oil prices in the international market, the monthly loss of the country’s state-owned oil companies on the sale of petrol, diesel and LPG has reached Rs 30,000 crore. To limit the impact of the increased international prices, the central government had reduced the excise duty on petrol and diesel by Rs 10 per liter in late March. Meanwhile, the oil PSUs are suffering huge losses.
Sharma said that the government is losing about Rs 14,000 crore in revenue per month due to the reduction in excise duty. If the government had not reduced excise duty, the losses of the three PSUs on fuel sales would have been even higher, Sharma said.
The blockade of the Strait of Hormuz has halted 20% of the world’s oil transport. Despite these external shocks, petrol and diesel prices in India have remained stable. There is no coordination between retail prices and increased production costs. Both the government and the oil marketing companies are bearing the burden equally. The government and the oil companies are losing up to Rs 24 per liter on petrol.
Similarly, the loss on diesel is Rs 30. According to sources, if the price hike is approved, petrol and diesel prices could go up by Rs 4-5 per litre and domestic LPG cylinders by Rs 40-50. If this happens, it will be a major revision in the prices of both the fuels in four years.
