Petrol, diesel rising prices: Government concerned, may announce new policy soon - Sources

On the back of the rising crude oil prices globally, the government's concerns on fuel prices – petrol and diesel – have increased, and in this regard, it may soon announce a policy, Zee Business Special Correspondent Ambarish Pandey said in his report. 

According to Pandey, “The oil marketing companies (OMCs) are reeling under financial pressure for not raising prices for a long time, similarly, a cost of Rs.9-11/L on petrol and Rs.23-25/L on diesel is yet to be recovered by the OMCs.” 

Amid these concerns, the government is working fast on alternative fuel and plan to increase ethanol from cereals along with sugar, the report also said. 

The government has been considering many options, including reducing tax, cutting excise, and reducing VAT from states, Pandey further said, expecting that the fuel prices, especially of diesel, are likely to increase. 

India's petrol and diesel consumption jumped in May as a pick up in the economic activity , as well as the start of the harvesting season, aided the return of demand, a preliminary industry data showed on Monday, according to a PTI report. 

Petrol sales grew 14 per cent during the first half of May when compared with the same period in the preceding month, while diesel demand rose 1.8 per cent. Cooking gas LPG, which last month saw consumption declining because of high prices, posted a 2.8 per cent rise in sales during May 1-15. 

Petrol sales by state-owned fuel retailers, which control roughly 90 per cent of the market, at 1.28 million tonnes during May 1-15 were 59.7 per cent higher than the same period last year and 16.3 per cent higher than the period in 2019, preliminary industry data showed. 

The consumption was 13.9 per cent more than the 1.12 million tonnes of sales in the first half of April 2022. 

(With PTI Inputs)