Oil retailers in India like IOC, HPCL and BPCL have announced break-even in cost of petrol. However, the companies have not yet recovered their costs on diesel.
A petrol pump staff refills fuel in a two-wheeler in New Delhi. The price of petrol and diesel remain unchanged in India since April 7 when the oil companies last revised the rates.
After reaching an all-time high in April, petrol and diesel prices in India have remained unchanged for the fifth consecutive month. In most parts of the country, the price of gasoline and diesel remains around $100. Since April, the oil retailing companies have not revised their rates on a daily basis. While it has provided relief to consumers who drive cars and two-wheelers, there is no immediate indication that fuel prices will fall. Despite the fact that international oil prices have fallen to a seven-month low.
Global crude oil prices have dropped below $90 per barrel for the first time since February. But according to the state-owned fuel retailers, they are still incurring loss on diesel, India’s most used fuel for commercial and personal vehicles. This is one of the reasons why there has been no modification in rates. The petrol and diesel prices in India continue to be on freeze for a record 158 days.
The Centre, which had previously reduced fuel taxes to halt rising oil prices, has linked losses incurred by oil retailers and ruled out any price cuts in the near future. “When (international oil) prices were high, our (petrol and diesel) prices were already low,” said Union Minister Hardeep Singh Puri. “Have we made up all of our losses?” He did not, however, go into detail about the losses incurred by keeping rates constant since April.
In the June quarter, the state-run oil retail trio of Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited lost Rs 18,480 crore on retail fuel. They recently broke even on gasoline, but continue to lose money on diesel. The prices of gasoline and diesel are usually revised daily by the three oil retailers. When price revision resumed on March 22, rates were raised by $10 per litre in two weeks. However, according to BPCL, the increase was insufficient to cover the costs.
At one point, the fuel retailers were losing ₹20-25 per litre on diesel and ₹14-18 per litre of petrol. “Next month (September) onwards there will be no losses on LPG. We don’t have any losses on gasoline (petrol) today,” Arun Kumar Singh, Chairman and Managing Director at BPCL, had said last month.
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India imports approximately 85% of its oil from other countries. Global prices have a direct impact on retail petrol and diesel prices in India. On September 8, India’s crude oil imports cost $88 per barrel, compared to an average of $102 in April and $116 in June. The Indian basket averaged USD 105.49 per barrel in July, when prices began to fall.
In the national capital, a litre of petrol costs 96.72 cents and a litre of diesel costs 89.62 cents. This is a decrease from the April 6 price of 105.41 for petrol and 96.67 for diesel as the government reduced excise duty to cool rates.