New Delhi: Pressure is mounting on state-run oil marketing companies (OMC) to reduce prices of petrol and diesel, after private refiner Nayara Energy cut its retail fuel prices on Wednesday. While OMCs have cut prices of jet fuel and commercial cooking gas, their auto fuels remain costly, even as global crude oil prices have fallen to pre-war levels.
Around 6.45 pm, the September contract of Brent on the Intercontinental Exchange was trading at $72.16 per barrel, 1.08% below its previous close, while the August contract of West Texas Intermediate (WTI) was at $69.16, lower by 0.49%. On 27 February, a day before the US and Israeli attacks on Iran, Brent had settled at $72.48 a barrel. The Indian crude oil basket is also nearing pre-war levels, currently standing at $70.58 per barrel, compared to the June average of $83.22 a barrel. In February, it averaged at $69.01 per barrel.
Rosneft-backed , India’s largest private fuel retailer, on Wednesday cut petrol prices by ₹5 per litre and diesel by ₹3 a litre across its 7,000 petrol pumps. In Gurugram, petrol is now priced at ₹102.76 per litre at Nayara pumps, while diesel is sold at ₹95.58 a litre, according to petrol pump dealers. However, other private fuel retailers like Jio-BP and Shell are yet to reduce prices.
Nayara was also India’s first retailer to raise prices on 26 March, after the erupted. Other OMCs, both public and private, are yet to roll back prices. The price of petrol at the pumps of Indian Oil Corp Ltd (IOCL) in Delhi is ₹102.12 per litre, while diesel is sold at ₹95.20 per litre. State-run OMCs—IOCL, Bharat Petroleum Corp. Ltd, and Hindustan Petroleum Corp. Ltd—account for 90% of the country’s around 100,000 pumps.
Kirit Parikh, former member (energy) of the erstwhile Planning Commission said: “The price should be cut now as oil prices have come down to pre-war levels. OMCs have the wherewithal to absorb the current international rates. Further, OMCs also need to compete with other private retailers. They will have to review the prices going forward.”
DK Sarraf, former chairman of Petroleum and Natural Gas Regulatory Board (PNGRB) and ONGC, however, noted that OMCs would wait for more stability in the oil prices.
“OMCs lost heavily when the crisis was there. They still sell at prices much below international rates. They would look to make good of the losses incurred and wait for crude prices to be stable. A consideration of all these factors would be required for any further revision,” he said.
OMCs raised petrol and diesel prices for the first time on 15 May, after holding on during the first two months of the war. Over four separate days, petrol and diesel prices were cumulatively raised by around ₹7.5 per litre.
Amid high under-recoveries, OMCs are estimated to incur losses of around ₹1 trillion in the first quarter of FY27.
Manas Majumdar leader, oil & gas sector, PwC India noted that there is a 50-60 day cycle in the process from crude procurement to refining to depots to eventually retail dispensation of the products—petrol and diesel. The products from crude procured now at lower basket would be in the market in coming next two months, he added.
“Broadly, it takes about 30 days for refining cycle and another 30 odd days for product to be at retail pumps. The fuel being sold at pumps now was processed from the crude procured at higher rates amid the war,” Majumdar said.
Queries mailed to the union ministry of petroleum and natural gas, Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd were not immediately answered.
Congress president Malikarjun Kharge on Saturday criticized the government over fuel prices. On social media platform X, he said that when crude prices surged amid the peak of the West Asia war, petrol was selling at ₹94.77 a litre and diesel at ₹87.67 a litre, but with crude oil now down to around $70 a barrel, petrol was still being sold at ₹102.12 a litre and diesel at ₹95.20 a litre.
State-run OMCs on Wednesday reduced the price of a 19-kg commercial LPG cylinder by ₹183.50. In the national capital, it is now priced at ₹2,930. This is the first downward revision in commercial cooking gas rates this year following a series of hikes amid the West Asia war that caused energy supply disruptions across the globe.
The price revision will provide relief to restaurants and other commercial users. Commercial LPG rates in India are revised monthly, tracking rates set by Saudi Aramco’s Official Selling Price (OSP). There has, however, been no revision in the rates of domestic LPG.
prices have also been reduced by ₹5,000 per litre with effect from Wednesday. In Delhi, aviation turbine fuel is sold at ₹1,10,000 per kilolitre.
The reduction comes after international oil prices softened in recent weeks following the signing of a memorandum of understanding between Iran and the US on 17 June.
In a press conference in Uttar Pradesh on 20 June, Union minister for petroleum and natural gas Hardeep Singh Puri said that petrol and diesel prices in the country have not effectively increased despite volatility in global crude oil markets.
“If we look at the situation in real terms, there has been no increase in petrol and diesel prices in the country,” Puri said, while adding that the government reduced central excise duty in November 2021, May 2022 and again recently in April. “There are 193 countries in the United Nations and only Japan has seen a lower increase in petroleum prices than India,” he added.