No proposal to bring uniformity in petrol, diesel prices in country: Government

There is no proposal before the government to bring uniformity in the prices of petroleum products in the country, Rameswar Teli, Minister of State in the Ministry of Petroleum and Natural Gas, told Parliament on Thursday.

He also said the prices of petrol and diesel vary from market to market due to various factors such as freight rates, value-added tax (VAT), and certain local levies.

Currently, the prices of petrol and diesel vary from city to city in the country. State-run oil marketing companies such as Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp review the retail prices on a daily basis, and enforce any revisions at 6 am to align them with the rates of international crude oil and foreign exchange.

Teli also highlighted that the government has reduced central excise duty by Rs 13 per litre and Rs 16 per litre on petrol and diesel, respectively, in two tranches in November 2021 and May 2022.

"The excise duty reductions were fully passed on to consumers and retail prices fell as a result. The measure was aimed at give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes. Subsequently, many States/UTs have also reduced VAT rates on petrol and diesel," he said.

The minister was responding to a question about whether the government has any proposal to distribute petroleum products at subsidised rates to those living below the poverty line.

He also said that LPG prices in the country are linked to the international market. However, the government continues to modulate the effective price to consumers for domestic LPG, he said.

The subsidy, as admissible, is credited to the bank accounts of eligible beneficiaries. Till December 2022, 9.6 crore PMUY connections have been provided to poor households in the country, he said.

The minister also pointed out that the government has started a targeted subsidy of Rs 200 per 14.2 kilogram cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for up to 12 refills a year for years 2022-23 and 2023-24.

"During the period 2020-21 to 2022-23, the average Saudi CP (an international benchmark for LPG pricing) went up from $415 per MT to $712 per MT. However, the increase in international prices was not fully passed on to retail prices, due to which the OMCs suffered under-recoveries of approximately Rs 28,000 crore on sale of domestic LPG.

To compensate this, the government paid a one-time compensation of Rs. 22,000 crore to OMCs in the financial year 2022-23," he said.

Teli also said that the government provided about 14.17 crore LPG refills to PMUY households free of cost under Pradhan Mantri Gareeb Kalyan Package during the pandemic.

Asked about the status of the production of biodiesel in the country, he said: "OMCs procure biodiesel for blending with diesel as per BIS standards. Biodiesel procurement by OMCs increased from 1.1 crore litres in 2015-16 to 11.57 crore litres in April-June 2023."

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