Petrol, diesel prices unlikely to be reduced soon; relief expected only on LPG

NEW DELHI: Reports say the prices of petrol and diesel are unlikely to be reduced in the near future. Public sector oil marketing companies have reportedly informed the central government that they do not want to lower fuel prices until they recover the losses incurred during the West Asia conflict. Fuel prices are reviewed on the first day of every month, and the companies will inform their stand to the Centre before the next revision. Demands for a reduction in fuel prices have intensified after global crude oil prices fell back to pre-war levels.

It is estimated that in May alone, public sector oil companies suffered revenue losses of up to Rs 1,000 crore per day from the sale of petrol, diesel and LPG. After domestic fuel prices were increased, the daily losses reportedly declined to around Rs 500 to 600 crore. The companies are estimated to have incurred total losses of nearly Rs 1 lakh crore between March to May. Reports say the government may allow the companies more time to recover these losses before considering a price cut. Despite a sharp rise in global crude oil prices, the companies had kept domestic fuel prices unchanged for nearly two and a half months to maintain price stability.

Uncertainty surrounding the future of the peace agreement between US and Iran is also discouraging oil companies from reducing prices immediately. Although the war has ended and the Strait of Hormuz has reopened, companies remain concerned that tensions could flare up again at any time, potentially leading to another closure of the strategic shipping route.

While petrol and diesel prices may remain unchanged for now, the Centre has reportedly asked oil companies to consider a marginal reduction in LPG prices. Following discussions between the union petroleum ministry and oil companies, reports indicate that the price of commercial LPG cylinders may be reduced. However, it remains unclear whether domestic LPG cylinder prices will also be cut.

The central government recently announced the withdrawal of restrictions on the supply of commercial LPG cylinders and has issued directions to states to restore the pre-war distribution system.