New Delhi [India], March 9 (ANI): India did not put the burden of rising energy prices on its citizens when global prices of LPG skyrocketed, and instead followed a citizens first approach, Union Minister for Petroleum and Natural Gas Hardeep Puri said on Saturday. During the Covid period from June 2020 to June 2022, the international prices of LPG increased by around 300 per cent, according to the central government.
However, to insulate consumers from fluctuations in international LPG prices, the cost increase was not fully passed on to consumers of domestic LPG. Accordingly, domestic LPG prices were raised by only 72 per cent during this period, leading to significant losses for the oil marketing companies. Despite these losses, the public sector oil marketing companies have ensured continuous supplies of this essential cooking fuel across the country.
“When the international prices went up, we allowed the price domestically only to go up by 70%, rest of it was absorbed…In this period, the prices came down by 4.56% in Delhi. We were having no issues with the availability… You have to refine the crude oil in a refinery to make petrol and diesel. The prices of petrol and diesel were reduced in November 2021 and May 2022,” Minister Hardeep Puri said at a press conference.
He added the central government under Prime Minister Narendra Modi ensured only a marginal price rise, which led to under-recovery of about Rs 28,000 crore for oil companies. He said 14 crore free LPG gas refills were provided to consumers during the Covid.
Later in October 2022, the central government gave a one-time grant amounting to Rs 22,000 crore to three Public Sector Undertaking Oil Marketing Companies (PSU OMCs). The grant was distributed among Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL).
At the press conference held today, Union Minister Hardeep Singh Puri said that the Centre was able to keep oil prices from shooting up despite global turbulence amid the Russia-Ukraine conflict and drone attacks on merchant ships in the Red Sea. He stated that India’s policy was ‘Nation First’ and the consumers’ interest was paramount.
The Union Minister for Petroleum and Natural Gas said 85 per cent of India’s crude requirements are met by imports, with the price of crude in the international market being the benchmark. The Union Minister elaborated on how the ‘Russia-Ukraine war’ impacted the crude oil supply, but India was able to manage its supply by diversifying its source and increasing the purchase from Russia despite fear of sanctions. “We know how the Russia-Ukraine war erupted. Russia produces 11-13 million barrels per day. One way was to stop buying crude oil from Russia, but it would have brought down the availability and we couldn’t have disrupted oil supply to the public. In that case, the prices would have shot up to USD 138…there were talks of sanctions,” Puri said.
“At that stage, we were buying only 0.2 per cent crude oil from Russia. But, we had to confront and navigate the situation. We have been diversifying our supply and increasing our purchases from Russia. Our policy is that from wherever we will get the crude oil as per our requirements, we will buy it, and it is a transparent system. When other countries saw this, they also gave us discounts. Our policy is ‘nation first’ and the consumer is paramount.”
Puri said that even though OPEC+ — a bloc of 23 oil-exporting countries including OPEC –reduced its crude oil production, oil prices didn’t rise in India. “Even the producing countries are taking steps to curtail production. OPEC+ reduced its production by 5 million barrels. Despite things standing as thus, the prices (in India) didn’t go up, which means the market absorbed it,” he said.
Also, the minister delved upon how his government had foregone revenue just to subsidise the consumers. The excise duty on petrol and diesel was cut by Rs 13 per litre and Rs 16 per litre, respectively, in two tranches, between November 2021 and May 2022. Also, he said many BJP-ruled states have subsequently reduced VAT on fuel to provide extra relief to the consumers. About Rs 2.2 lakh crore in revenue was foregone, the minister apprised. (ANI)
Rs 2.2 lakh crore revenue foregone due to excise duty cuts on petrol, diesel: Hardeep Puri
New Delhi [India], March 9 (ANI): Around Rs 2.2 lakh crore of revenue was foregone because of cuts in excise duty on petrol and diesel announced between November 2021 and May 2022, Union Minister Hardeep Singh Puri on Saturday. Addressing a press conference, Hardeep Puri, who is Union Minister for Petroleum and Natural Gas, talked about the steps taken by the Modi government to reduce and maintain fuel prices despite fluctuations in global crude oil prices.
“Excise duty on petrol and diesel was cut by Rs 13 a litre and Rs 16, respectively, between November 2021 and May 2022. Revenue foregone as a result of the cuts was Rs 2.2 lakh crore,” he said.
Responding to a question on the likelihood of a cut in petrol and diesel prices, the minister said that the decision to reduce retail fuel prices would depend on the stabilization of the geopolitical scenario and international oil prices. “I will only say that if the situation of the world is stable, oil prices stable, then it (price cut on petrol and diesel) can be looked at”.
“But if you say an attack is taking place somewhere in the world and insurance and freight price go up…” he said, as he referred to the Houthi attacks in the Red Sea and the Russian-Ukraine war. The Union Minister said 85 per cent of India’s crude oil requirements are met by imports, with the price of crude in the international market being the benchmark. (ANI)
