Opinion: Crude price has halved in a year, so why there is no reduction in Petrol-Diesel price? LPG has become costlier – price of crude remained half in a year but no reduction in petrol-diesel price

New Delhi: These days the prices of crude oil are decreasing in the world market. About a year ago, when Russia attacked Ukraine, the price of crude oil had gone up to $139 per barrel. Since then till now the price has come down significantly. In the international market last Friday, the price of American WTI Crude had closed at $ 66.74 per barrel. Ever since the Ukraine war started, India has been buying cheap Russian Crude Oil from Russia. But even then people have not got relief here in the domestic market. It’s about to be a year when India’s government oil companies have made any changes in the prices of petrol and diesel.

Last modified on 6 April 2022

There has been no change in the price of petrol and diesel in the country for almost a year. Yes, when the central government or the state government has reduced the duty and VAT on it, then the prices have definitely come down. Government Oil Marketing Companies (OMCs) last increased the price of petrol and diesel on 6 April 2022. On that day, both the fuels became costlier by 80-80 paise. After this, on 27 May 2022, the central government had cut excise duty on petrol and diesel. Then there was a reduction of Rs 8.69 in the price of petrol and Rs 7.35 in the price of diesel. Since then the price of petrol and diesel has remained the same. In Delhi today i.e. on Sunday, March 19, 2023, the price of petrol remained stable at Rs 96.72 and diesel at Rs 89.62 per litre.

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Crude-derived LPG has also not become cheaper

Crude oil not only produces petrol and diesel but also produces liquid petroleum gas or LPG. It is sold by filling it in cylinders. This LPG cylinder is used to cook food in most of the houses in India. When crude oil has become cheaper, its by-product LPG should also become cheaper. But instead of decreasing the price of LPG in India has increased. In the last one year, the price of domestic LPG cylinder has increased by 22 percent. On March 1, 2022, the price of a domestic LPG cylinder (14.4 kg) was Rs 899.50. By March 1, it increased by 22 per cent to Rs 1,103.

CNG has also become costlier by 38 percent in a year.

The price of CNG in Delhi has increased by around 38 per cent during the last one year period. According to the data of Indraprastha Gas Limited, the company supplying CNG in Delhi, the price of CNG on March 1, 2022 was Rs 57.01 per kg. This price has increased to Rs 79.56 per kg on March 1, 2023. That means an increase of 38 percent.

India is buying cheap Russian crude oil

In February last year itself, Russia attacked Ukraine (Russia Ukraine War). After that many western countries including America had imposed various types of sanctions on Russia. To deal with it, Russia had offered to sell crude oil to many countries of the world including India at a lower price than the market. India accepted this offer. This angered America and other European countries as well. There was news that India is buying around 1.2 million barrels of crude oil from Russia every day. Cheap crude means that the products made from it should also be cheap. But it did not happen.

Why LPG cylinders have not become cheaper?

The Union Ministry of Petroleum had informed the Parliament on Thursday itself that domestic LPG prices are based on average Saudi Contract Prices (CP). The government says that during the years 2019-20 to 2021-22, Saudi The contract price has increased from $454 per tonne to $693 per tonne. The Saudi CP for February 2023 has increased to $790 per tonne during the year 2022-23. Hence, LPG cylinder prices have gone up in the domestic market. India imports more than 60 percent of its domestic LPG consumption.

Loss on sale of LPG cylinders?

The government says that public sector oil marketing companies have suffered huge losses on the sale of domestic LPG cylinders. To make up for these losses, the government recently gave a one-time compensation of Rs 22,000 crore to all state-run oil companies or OMCs. According to the Petroleum Ministry, the government has introduced a targeted subsidy of Rs 200 per 14.2 kg cylinder for up to 12 refills for the year 2022-23 for the beneficiaries of Pradhan Mantri Ujjwala Yojana (PMUY).

Disclaimer: This post has been auto-published from an agency/news feed without any modifications to the text and has not been reviewed by an editor.

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