Fuel prices: Some relief expected in coming months, says Union minister

Aug 25,2021

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Tuesday said that the government was sensitive to the increase in fuel prices and will soon provide relief to customers, The Indian Express reported.

While responding to a query on fuel price rise, Puri admitted that international oil prices were now slowly decreasing and stabilising. But, defending the rise in prices in India, he said that the Centre imposes an excise duty of Rs 32 per litre on fuel and this revenue is used to finance various welfare schemes.

“The central government is also very sensitive to other responsibilities that we have,” the Union minister said, according to PTI. “The government provided free rations to 80 crore people, free vaccines, all other facilities. So it’s a part of that picture.”

Puri added that the excise duty remains the same as it was in April 2010. “For example, when international price was 19 dollar 60 cents or 64 cents per litre, then also we used to impose Rs 32 per litre,” he said. “Now when it is 75 dollar per litre, we are still imposing the same Rs 32 per litre.”

On August 18, Puri had blamed the earlier United Progressive Alliance government for deregulating the prices of petrol and diesel in 2010, saying that the measure causes an impact on the local market when international rates of fuel change.

He also claimed that before 2014, the Congress government had issued oil bonds worth Rs 1.34 lakh crore to control the prices of petrol. Puri claimed that the Congress passed on this “problem” to the Bharatiya Janata Party government. 

Oil bonds are a kind of special securities issued by the government of India to public entities like oil marketing companies, Food Corporation of India and fertiliser companies in lieu of cash subsidies, according to a Reserve Bank of India report.

A day before Puri’s statement, Finance Minister Nirmala Sitharaman had also blamed oil bonds for high fuel prices.

In response, Congress spokesperson Randeep Surjewala had claimed that oil bonds were not due for payment yet. The Congress leader also said that the Narendra Modi-led government has “extorted Rs 22,33,868 crore” by levying excise on petrol and diesel in the past seven years.

Currently, petrol and diesel in Delhi cost Rs 101.49 and Rs 88.92 per litre respectively, according to The Financial Express. Among the metro cities, Mumbai presently has the highest fuel prices. Petrol and diesel in Mumbai currently cost Rs 107.52 and Rs 96.48 per litre. 

On August 22, state-run oil marketing companies reduced petrol prices by 15 to 20 paise per litre and diesel prices by 18 to 20 paise per litre. Petrol prices were cut on August 22 after they had remained static for over 35 days, India Today reported.

Petrol and diesel prices had hit a record high on July 17. Petrol prices breached the Rs 100 per litre-mark in several cities as state-owned oil firms increased fuel prices on 41 occasions since May 4.