Fuel Price Cut Possible! Government Monitoring Geopolitical Situation

Hardeep Singh, the Union Minister for Petroleum and Natural Gas, has indicated that a reduction in petrol and diesel prices will hinge on the stabilization of the geopolitical situation and international oil prices. Singh highlighted that oil marketing companies are still facing losses on diesel sales due to under-recoveries.

Speaking on the potential Fuel Price Cut, Singh emphasized the need for stability in global affairs and oil markets. He pointed out the ongoing tensions in the Red Sea region of West Asia, which could lead to further volatility in energy prices. Singh recalled that the central government had previously reduced excise duties on petrol and diesel in November 2021 and May 2022, resulting in a total revenue loss of about Rs.2.2 trillion.

Despite cuts in production, global crude oil prices have remained stable, indicating the market’s ability to absorb changes, Singh noted. On Friday, the Brent crude oil contract for May closed at $82.08 per barrel on the Intercontinental Exchange, showing a slight decrease from the previous close.

Meanwhile, the government has announced a Rs.100 reduction in the price of LPG cylinders, effective immediately. This decision comes ahead of the announcement of election dates by the Election Commission of India. Prime Minister Narendra Modi, during a recent Cabinet meeting, extended the LPG cylinder subsidy until 2024-25, and on International Women’s Day, he announced the price reduction.

Singh also highlighted the government’s efforts to ensure LPG availability across the country, mentioning instances where cylinders were delivered personally, even during emergencies like floods in the Northeast. He further mentioned the Union Cabinet’s approval for extending the Rs.300 subsidy on LPG cylinders for beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) for the next fiscal year (FY25). PMUY, initiated in 2016, aims to provide cleaner cooking fuel to impoverished households identified through various criteria such as the socio-economic caste census (SECC) list and other designated categories.