Govt keeping close eye on international oil prices

The government is keeping a close eye on the international oil prices, Petroleum Minister Dharmendra Pradhan said on Monday, at a time when petrol and diesel prices have touched multi-year highs in the country.

“Petroleum products are international commodities, and so whenever there is a price hike in crude oil then there are some pinching prices in our market also,” Mr Pradhan said at the launch of BS-VI standard fuel in the national capital. “India is a consumer sensitive country. We [the government] are concerned and are on the job. We are keeping a close eye on the developing international oil scenario.”

Mr Pradhan, however, did not mention any possible move by the government to de-link prices in India from international oil prices, nor did he say that the government would consider reducing its excise duties on fuel.

“India needs market pricing to provide oil to all,” he said. “The Centre and the states bank on tax revenues to meet developmental needs. 42% of collections from excise duty [on petrol and diesel] goes to states and out of the remaining 60% is used to fund centre's share in development schemes in states.”

Petrol price on Monday hit a four-year high of Rs 73.83 a litre, while diesel rates hit an all-time high of Rs 64.69 in the national capital.

Speaking about the rollout of the cleaner BS-VI grade fuel in the national capital from April 1, 2018 onwards, Mr Pradhan highlighted the fact that the original deadline was 2024, which was then brought forward to 2020.

“We have brought it to Delhi by 2018,” he said. “Delhi’s demand is about 2 million tonnes of diesel. Even those people in Delhi who don’t run vehicles or buy diesel, are affected by pollution. They will also be benefited by this clean fuel.”

“I urge carmakers to retrofit their existing cars,” Mr Pradhan added. “And according to SIAM, I have heard that they already supply BS-VI compliant vehicles and ship them to Europe. The technological adjustment is not much to make them right hand drive from left hand drive.”

Air pollution results in about 3% of GDP being spent on health spending itself, the Minister said.

“I appeal to the GST council that these products be included in the GST framework,” he added. “Consumers should get the products on a rational price in the entire country.”