regular-article-logo Thursday, 08 June 2023

Why can’t you pass on benefit of lower crude prices to consumers, Congress asks Modi government

Party asks government to make public the names of industrialists who have benefited from cheaper Russian crude oil

Sanjay K. Jha New Delhi Published 23.03.23, 03:32 AM
Representational image

Representational image File Photo

The Congress on Wednesday asked the Narendra Modi government why it was not passing on to consumers the benefit of cheaper crude oil in the international market and in spite of making “so much noise” about buying cheap Russian oil during the Ukraine war.

The Congress asked the government to make public the names of industrialists who, besides public sector refiners, have benefited from cheaper Russian crude oil.


“Why can’t the benefit of falling crude oil be transferred to the final consumers? In the past 305 days, since the Centre changed fuel prices the last time, crude oil prices have come down by Rs 16.75 a litre. Why is the same benefit not transferred to people in the country? Why do dynamic fuel prices work only in one direction, only to increase the prices?”

Congress spokesperson Gourav Vallabh asked. The last countrywide change in petrol and diesel prices was made on May 21, 2022. “According to data provided by the ministry of petroleum and natural gas, the crude oil price India was paying in May 2022 was $109.5 a barrel. On March 20, 2023, the price India was paying had dropped to $70.69 a barrel. In other words, we were getting crude oil at Rs 53.45 a litre in May 2022, and this fell to Rs 36.68 a litre as on March 20, 2023,” he said.

The price Indian consumers are paying for petrol can be slashed by Rs 16 a litre without touching the excise duty, Vallabh said. This is not the first time the Modi government has failed to pass on to consumers the benefit of a fall in international rates. Crude prices crashed to $20 per barrel a few years ago, but petroleum products in the country continued to be sold at a high rate. Vallabh asked: “Which private refiners got cheaper crude oil from Russia and at what rate? As per various reports, nearly three-quarters of cheap Russian oil was purchased by private refiners. These companies bought cheaper oil and sold it to foreign countries after refining.”

Wondering how it turns out that India benefited only $2 a barrel from Russian oil, Vallabh said: “We heard so much noise about the purchase of cheap Russian oil during the Ukraine war. As per the analysis, cheaper Russian oil lowered the average price of imported crude oil by just $2 per barrel during the nine months. If we get just $2 per barrel of savings after so much noise, and that too is not transferred to the final consumers, what’s the use? Other than public sector refineries, who in India is buying Russian oil?”

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