Petrol prices in India Lowest compared to other countries: Minister

NEW DELHI: Union Petroleum minister Hardeep Singh Puri has said that petrol prices are perhaps the lowest in the country compared to other countries in view of the current global situation and international crude prices and that petrol prices in India increased by two per cent in the representative period between 2021 and 2022 when they rose by a steep margin internationally.

Replying to questions during question hour on Thursday, he said while some states had reduced VAT to bring down the price of petrol and diesel following a reduction in excise duty by the Centre, some opposition-ruled states had not done so.

"I would like to point out that the states of West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, and Jharkhand did not cut their taxes," Mr Puri said.

He said the Central Government, in order to maintain the price at the pump at a reasonable level, reduced the excise duty on two occasions in November, 2021 and May, 2022.

"I am happy to inform you that some other States also reduced VAT. Now, we have a situation where some of the States - I am not calling them BJP states, but there are one or two other states also - which have reduced their VAT. Some of them are charging VAT at the rate of ₹ 17 and other non-BJP States are charging at ₹ 32.

"So, there is a differential. When the member was saying that today the cost of petrol is ₹ 100 per litre in some places - in some places which are non-BJP States - and in other states, it is ₹ 8-10 cheaper. Today, the important issue is that at a time when globally- I am talking about the geopolitics - we are facing many uncertainties, let me give you the example of petrol prices," he said.

"The petrol prices went up by a large margin internationally. They went up by percentages which are sometimes 40 per cent higher or 50 per cent higher. In India, petrol prices increased by only two per cent during that representative period between 2021 and 2022. Why? It is because we reduced our excise and we urged States also to reduce their VAT. Some did, some did not," he added.

He said the ability to keep the price steady and allow the increase of price of petrol only by two per cent - while internationally it went up by a very large per cent -was possible because the Oil Marketing Companies as good corporate citizens took a loss.

"I have some figures here which are very telling. The OMCs made a profit before tax of ₹ 28,360 crore in H1 of the financial year 2021-22. This is profit before tax of ₹ 28,360 crore. These three companies, namely, IOCL, BPCL, and HPCL, in the H1 of the next year have booked a combined loss of ₹ 27,276 crore. So, it is a combination of the Central Government's reduction of excise at a time when we were going through a very difficult period and there were other expenditure liabilities, and state governments reducing their VAT," he said.

"Today, petrol prices in India are perhaps the lowest. The average price of crude in the Indian basket increased by 102 per cent. It went up from $43.34 to $87.55 between November 2020 and November 2022. At that time when it was up by 102 per cent, the retail price of petrol went up only by 18.95 per cent. Now, how much of this is the exchange rate variation? That is one question. The government which is committed to energy security and affordability," he said.