Centre considers significant petrol, diesel price reduction ahead of 2024 elections

No adjustments have been made to petrol and diesel prices since May 2022. Earlier, oil companies faced losses of Rs.17 per litre on petrol and Rs. 35 on diesel.

NEW DELHI | Updated: 29 December, 2023 1:55 pm IST
The Modi government led Centre is considering to reduce petrol and diesel prices

NEW DELHI: The Centre is considering a substantial reduction in petrol and diesel prices, with reports suggesting a possible cut of up to Rs. 10 for both fuels. The government is reportedly in discussions with oil companies to finalise the decision.

No adjustments have been made to petrol and diesel prices since May 2022. Earlier, oil companies faced losses of Rs.17 per litre on petrol and Rs. 35 on diesel. However, with the decrease in crude oil prices, these companies are now experiencing profits of Rs. 8 – Rs.10 per litre on petrol and Rs. 3 – Rs. 4 on diesel.

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Sources indicate that the decision to lower fuel prices significantly is strategically timed ahead of the 2024 Lok Sabha elections, providing relief to consumers across the nation. The Union Finance Ministry is expected to implement this price cut soon, taking advantage of the current decline in international crude oil prices.

The proposed reduction could be as high as Rs. 10 for both petrol and diesel. This move comes nearly two years after the government previously slashed prices by cutting the Central Excise Policy by Rs. 8 and  Rs. 6 for petrol and diesel, respectively.

Presently, petrol and diesel prices in Delhi stand at Rs. 96.71 and  Rs.  89.62, respectively. However, prices are above Rs.100 in major cities like Mumbai and Bengaluru. The recent surge beyond  Rs. 110 in various metro cities was attributed to market fluctuations due to the COVID-19 pandemic and the Russia-Ukraine war, causing a spike in crude oil prices.

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Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, credited the Modi government for the reduction in oil prices in India. Despite a 70-80 per cent increase in petrol prices in North American countries, India witnessed a 5 per cent drop in rates.

With crude oil prices currently trading at $70 to $80 per barrel in international markets, a proposal has been forwarded to the Prime Minister’s Office in favour of reducing fuel prices. The three major government-run oil companies in India – Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), and Hindustan Petroleum Corp (HPCL) – have reported substantial profits due to the decline in international crude oil prices.

 

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