Petrol and diesel prices cut ahead of assembly elections
- The price of petrol dropped by 18 paise per litre, while diesel price fell by 17 paise a litre in Delhi
State-owned oil marketing companies (OMCs) cut petrol and diesel prices on Wednesday—after holding them steady for 25 days, in the run-up to the assembly elections in West Bengal, Assam, Kerala, Tamil Nadu, and Puducherry.
As a result, while the price of petrol fell by 18 paise per litre in Delhi, diesel price was cut by 17 paise per litre. Petrol and diesel were retailing at Rs90.99 per litre and Rs81.30 per litre, respectively, on Wednesday in Delhi.
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Fuel prices in India have been at a record high after the Organization of the Petroleum Exporting Countries (Opec)-plus grouping’s decision to continue with crude oil curbs. There has been a moderation in global crude oil prices after maintaining an upward trajectory.
The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was at $62.71 a barrel on 23 March. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April before recovering to $61.22 a barrel in February, data from the Petroleum Planning and Analysis Cell showed.
Interestingly, the diesel and petrol retail prices in India have remain subdued during the elections, with three government-run oil marketing companies—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—refraining from raising prices.
The state-run OMCs and the government have maintained that there is no correlation between elections and transportation fuel price freeze. The government’s stand has been that it has got no role in pricing since India’s three government-run oil marketing companies introduced dynamic fuel pricing, joining countries such as the US and Australia, where fuel prices change daily depending on global oil price fluctuations.
This comes against the backdrop of India’s oil and gas import dependence during April-January accounted for meeting 77.1% of the domestic needs. India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and increase its trade deficit. India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19.
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