Fuel price cut: OMCs slash petrol, diesel prices by Rs 2 per litre nationwide

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.