Consumers may soon experience major relief as long-static petrol and diesel prices are expected to fall after more than a year of standstill. Discussions inside the administration are currently being held to pass on the favorable effects of the recent drop in crude oil prices to the general public, particularly in view of the forthcoming 2024 Lok Sabha elections.
According to sources, oil marketing corporations (OMCs) are currently profitable across both petrol and diesel, pushing the government to consider lowering rates for the benefit of customers. The finance and energy ministries are debating the current crude oil price scenario, taking into account both the financial viability of OMCs and global issues.
Additionally, OMCs currently generate profits of ₹8-10 per liter on petrol and ₹3-4 per liter on diesel, a significant increase from 2022’s highest deficits of ₹17 per liter on petrol and ₹35 per liter on diesel. With OMCs, the oil ministry has previously reviewed the crude versus retail cost scenario.
OMCs’ overall losses have been greatly reduced as a result of strong gains in the last three quarters. The combined earnings of three main OMCs – IOC, HPCL, and BPCL – in the past quarter was an astounding of ₹28,000 crore. Given that OMCs are already profitable with no under-recovery, there is an increasing understanding that the advantages shall pass to customers
The possible fall in the cost of petrol and diesel not only provides relief to consumers, but it also accords with the government’s objectives to control inflation. Furthermore, the central government believes that crude oil rates will stay within the $75-80 per barrel zone.
It is worth noting that fuel prices in the country have stayed stable for almost a year, with the most recent modification being on May 21 of the previous year, when Finance Minister Nirmala Sitharaman decreased excise duty on petrol by ₹8 per liter and diesel by ₹6 per liter.