No decision yet on capping refinery prices, says oil ministry

Centre has not taken any decision on capping the refinery prices

• No decision to cap refinery prices amid West Asia conflict
• CNG and PNG supply remains uninterrupted across India
• Gas companies offer incentives for new PNG users

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The Centre has not taken a decision to cap refinery prices, petroleum ministry joint secretary Sujata Sharma has said, as the Iran war, which is in its third week, continues to pose a risk to India’s energy supplies.

Responding to reports that refiners were considering to freeze or fix a discount on the refinery transfer price (RTP), Sharma said, “No such decision has been taken at all.”

RTP is the internal rate refineries charge their marketing arms. When capped, this price is set below the import-parity cost (the global market price) of fuels such as petrol and diesel to shield consumers from market spikes.

Although Indian refining margins are surging, retail pump prices remain frozen despite high crude costs, resulting in significant marketing losses.

According to reports, state-run oil marketing companies — Indian Oil, BPCL, and HPCL — were mulling to pay less to state and private refiners.

“Crude is available in sufficient quantities. All refineries are operating at the highest capacity. Our petrol pumps are operating normally. No dry out has been reported anywhere,” Sharma at an inter-ministerial briefing on March 17.

Gas supplies

The Centre on March 14 issued an order requesting consumers who have both PNG and LPG connections to surrender their LPG connection. "We request consumers to shift to alternate sources of energy wherever available instead of LPG," she added.

The supply of compressed natural gas (CNG) and piped natural gas (PNG) continues uninterrupted across the country, even as authorities step up efforts to move households away from LPG where gas pipelines are available.

Sharma said city gas distribution companies, including Indraprastha Gas, Mahanagar Gas, GAIL, and BPCL, have rolled out incentives for new PNG users. IGL has announced free gas worth Rs 500 for consumers registering for PNG connections before March 31.

GAIL has offered free gas worth Rs 500 to its domestic consumers. BPCL has waived off security deposit for all commercial connections.

War hit

The US-Israel war on Iran, which is in its third week, has led to the closure of the Strait of Hormuz through which 40 percent of India’s oil and almost 90 percent of LPG used to pass.

India imports about 60 percent of its total LPG needs and of it, 90 percent pass through the Strait, primarily from Saudi Arabia, Qatar, and the United Arab Emirates (UAE).

With Iran targeting US allies in West Asia, uncertainty looms over supplies from the region though Tehran has allowed some India-bound ships carrying crude and gas to pass through the vital shipping channel.