State-run Oil Marketing Companies (OMCs) announced a reduction in petrol and diesel prices by Rs 2 per litre across country, to be effective from 6am on March 15.
Petrol prices in Delhi would now be Rs 94.72 per litre compared to Rs 96.72 per litre earlier, while diesel would be sold at Rs 87.62 per litre. The move by the OMCs comes ahead of the Lok Sabha elections in the country.
"Reduction in petrol and diesel prices will boost consumer spending and reduce operating costs for over 58 lakh heavy goods vehicles running on diesel, 6 crore cars and 27 crore two-wheelers," Ministry of Petroleum and Natural Gas said on X.
Fuel prices in India were left unchanged since May 2022 despite correction in crude oil prices. Typically, OMCs – Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) -- revise retail petrol and diesel prices daily, based on the rolling average of international benchmark prices over the past 15 days.
In a similar move, Prime Minister Narendra Modi had announced reduction of Rs 100 in the price of 14.2 kg LPG cylinders in the country on March 8 --on the occasion of International Women's Day.
Last week, Petroleum and Natural Gas minister Hardeep Singh Puri had said said reduction in domestic fuel prices could be considered when international crude oil prices stabilise. The minister had also pointed out that the OMCs are still facing under-recovery on the sale of diesel.
Crude oil prices are currently trading around $80 per barrel, compared to highs of $140 per barrel in March 2022.
"When the world was going through difficult times - petrol prices increased by 50-72 percent in developed and developing countries and in many countries around us petrol was no longer available, even then, in the fifty years after 1973, Despite the biggest oil crisis, Modi's family was not affected due to his visionary and intuitive leadership. Instead of increasing, petrol prices in India decreased by 4.65 percent in the last two and a half years!," Puri said in a post on X, formerly Twitter.
Price freeze
While the international crude oil prices have cooled down significantly in 2024 and are currently trading below $80 per barrel, the OMCs did not revise prices as they were making up for losses they made due to a previous price freeze.
Previously, even as crude oil prices soared, OMCs did not increase retail price and froze it for a record 137 days beginning November 4, 2021. The timing coincided with the time that states like Uttar Pradesh went to polls, even though the government denied any link between the two. That freeze ended on March 22, 2022 and prices were revised regularly by a total of almost Rs 10 before it was frozen again from April 7, 2022.
To provide relief to consumers, the central government in May 2022 had reduced excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre.
The 132-days price freeze in 2021-22 hit the OMCs in the subsequent quarters in 2022-23 as margins shrank and they reported losses. These companies have now started booking profits in the recent quarters but left prices unchanged again despite crude oil prices softening to make up for the losses made earlier.
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