New Delhi: Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Thursday informed the Parliament that prices of petrol and diesel had not been increased by state-owned oil marketing companies (OMCs) since April 6, 2022, despite record-high international prices.
The minister also claimed that this resulted in the combined 'Profit Before Tax' of Rs 28,360 crore in H1 of the financial year 2021-22 of the three OMCs viz. Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL). These three OMCs have booked a combined loss of Rs 27,276 crore in H1 of the current financial year.
India imports more than 85 per cent of its crude oil requirements. Therefore, the prices of petrol and diesel in the country are linked to their respective prices in the international market, he added.
The retail prices of fuel depend on various factors - crude oil purchase price, exchange rate, shipping charges, inland freight, refinery margin, dealer commission, central taxes, state VAT and other cost elements.
"While the average price of Indian basket of crude oil increased by 102 per cent (from $43.34 to $87.55) between November 2020 and November 2022, the retail prices of petrol and diesel have increased in India by only 18.95 per cent and 26.5 per cent during this period," the minister informed the Lok Sabha.
Whereas the IEA's report for November 2020 and November 2022 indicates that, in the USA the petrol price increased by 98.2 per cent and diesel price by 144.6 per cent, in Canada petrol price increased by 80.6 per cent and diesel price by 138.4 per cent, in Spain petrol price hiked by 40.1 per cent and diesel price by 74.1 per cent, and in United Kingdom the petrol price hiked by 41.0 per cent, while the diesel price increased by 52.0 per cent, Puri mentioned in his reply to the Parliament.
The minister also claimed that the central government reduced Central Excise duty twice to insulate Indian consumers from the impact of high international crude oil prices. "To insulate the Indian consumers from the impact of high international crude oil prices, Central Government reduced the Central Excise duty twice on November 21, 2021, and May 22, 2022, effecting a cumulative reduction of Rs 13 and Rs 16 per litre for petrol and diesel respectively, which was fully passed on to consumers," Puri added.
Following these reductions in central excise duty, some of the states and union territories (UTs) also reduced value-added tax (VAT) rates on petrol and diesel, he said.
"West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala and Jharkhand did not cut their taxes. I would request the members of parliaments from these states that they ask their respective state government to lower the VAT," Puri said.
India also imports more than 60 per cent of its domestic LPG consumption. Prices of LPG in the country are based on Saudi Contract Price (CP), the benchmark for international prices of LPG.
"Saudi CP rose from 236 $/MT in April 2020 to 952 $/MT in April 2022 and continues to prevail at elevated levels currently. However, the government continues to modulate the effective price to consumers for domestic LPG.
Public Sector Oil Marketing Companies have suffered huge losses on the sale of domestic LPG. To compensate for these losses, the Government has recently approved a one-time compensation of Rs 22,000 crore to OMCs," the minister's reply mentioned further.