Average price of Indian crude oil basket increased by 102% in two years

New Delhi: The retail prices of petrol and diesel in India have respectively increased by 18.95 per cent and 26.5 per cent over the past two years, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri told the Lok Sabha on Thursday.

His was responding to a question on whether there has been an increase in the prices of petrol and diesel during the last two years. India imports more than 85 per cent of its crude oil requirements.

Puri said in a written reply that the prices of petrol and diesel in the country are linked to their respective prices in the international market.

The retail prices of petrol and diesel depend on various factors viz. crude oil purchase price, exchange rate, shipping charges, inland freight, refinery margin, dealer commission, central taxes, state VAT and other cost elements, the minister said.

Over the past two years, the average price of the Indian crude oil basket, however, increased by 102 per cent (from USD 43.34 to USD 87.55).

Puri added prices of petrol and diesel have not been increased by public sector Oil Marketing Companies (OMCs) since April 6, 2022, despite record-high international prices.

“As a result, against the combined ‘Profit Before Tax’ of Rs 28360 crore in H1 of the financial year 2021-22, the three OMCs viz. IOCL, BPCL and HPCL have booked a combined loss of Rs. 27,276 crore in H1 of the current financial year 2022-23,” the minister said.

To insulate the Indian consumers from the impact of high international crude oil prices, the central government, Puri said, reduced the central excise duty twice in November 2021 and May 2022, effecting a cumulative reduction of Rs 13 and Rs 16 per litre for petrol and diesel respectively, and was fully passed on to consumers. Some of the states also follow suit.

Regarding LPG cylinders, the unit price for 14.2 kg size increased from Rs 644 to Rs 1,053 since December 2020, a rise of 63 per cent during the period.

India 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 global benchmark.

“Saudi CP rose from 236 USD/MT in April 2020 to 952 USD/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 these losses, the government has recently approved a one-time compensation of Rs 22,000 crores to OMCs,” Puri said.