Petrol and diesel prices are unlikely to come down for the next two to three months, Union petroleum minister Hardeep Singh Puri hinted on Thursday, saying oil marketing companies are currently selling fuel produced from petroleum stock procured two months ago, when crude oil prices were elevated during the peak of the West Asia crisis.
“The petrol and diesel that you buy at the dispensing station today, that crude would have been obtained two months ago,” Puri told reporters at a press conference, explaining the dynamics behind fuel pricing and responding to questions on whether fuel prices are likely to decline soon.
Puri said the crude was purchased when international prices were significantly higher. “So today, that crude is being sold,” Puri said.
“If the prices come down to 70 or below, that crude will arrive here much later,” he said, indicating that fuel prices could be reviewed if crude oil prices remain low over the coming weeks.
“As for your question about when prices may come down further, if prices remain at the current level, the situation will become clearer in the coming period. It would not be appropriate for me to speculate,” Puri said in response to a query on fuel prices.
Petrol in Delhi is priced at around ₹102 per litre. In Calcutta, it retails at ₹113.51.
Oil companies typically procure crude oil—the raw material used to produce fuel—at least two months in advance. As a result, the crude currently being refined was largely purchased in April or early May, when international prices were at their peak.
Crude oil prices began easing only in the second half of June after the US and Iran reached an agreement to end the conflict.
Oil firms’ losses
Oil marketing firms suffered losses of ₹74,781 crore from selling petrol, diesel and LPG below cost for the period up to June 30, Puri said. “The government reduced excise duty by ₹10 per litre on petrol and ₹10 per litre on diesel, resulting in a revenue sacrifice of ₹1 lakh crore,” he added.
Defending the increase in prices, Puri said that over the past four years, the price of petrol in Delhi has risen from ₹96 per litre to ₹102 per litre.
Between 2022 and 2026, petrol prices increased by 5.58 per cent and diesel prices by 6.23 per cent, he said. The rise in fuel prices was much lower than in developed countries such as France, Germany and Italy, as well as neighbouring countries such as Pakistan, Sri Lanka and Bangladesh, he added.
Exports to Russia
Puri on Thursday said that Indian companies were not selling fuel to Russia, but it was “possible” that Russia purchased Indian-origin fuel from traders.
Russia-backed private refiner Nayara has been relying on traders to import crude and export refined fuels since EU sanctions imposed last July complicated payments with customers and suppliers.
Two sources told Reuters on Thursday that traders have sold gasoline produced by Nayara Energy to Russia.