Petrol/diesel prices to go down soon? Oil minister Hardeep Singh Puri hints at possibility

Petrol and diesel prices in the country could be slashed but not before state-owned oil companies have recouped their past losses, Minister of Petroleum and Natural Gas, Hardeep Singh Puri suggested recently at an event. “I will hope if under-recoveries (or losses) end, prices should come down,” Puri said as per a PTI report.

State-owned Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd have not revised petrol or diesel prices in the past 15 months in line with the cost. The losses incurred during this period are now being recouped. The recent softening of international crude prices from a record high in 2022 had led to increased profits on petrol but loses Ioss on diesel continued.
Profit on petrol peaked at Rs 10 per litre, however, subsequent firming up of prices slashed that margin by half. Loss of diesel on the other hand has increased to Rs 13 per litre from Rs 10-11 up till early January 2023, industry sources report. According to Puri, these state-owned companies acted as responsible corporations by not burdening the consumers with the rising energy prices in the aftermath of Russia’s invasion of Ukraine.

IOC, BPCL and HPCL have not changed fuel prices since April 6, 2022, despite increase in input cost of crude oil at USD 102.97 per barrel, which fell to USD 116.01 by June and USD 82 per barrel in January 2023. Holding the prices has led to the three state-owned oil companies to post combined net loss of Rs 21,201.18 crore between April to September 2022. Puri said the six month loss numbers are known and they have to be recovered. Meanwhile, the oil ministry is pushing for compensation of the three retailers to make for the losses they incurred.