Home > Crude Oil & Petroleum > Petroleum prices in India

Petroleum prices in India

Currently, price of four essential petroleum products, namely, petrol, diesel, kerosene (under PDS) and LPG domestic are subsidised in India. Subsidising the domestic consumers resulted in huge fiscal burden for the Government and financial problems for the public sector oil marketing companies (OMCs) like HPCL, BPCl and IOCL.

Thus, an Expert Group was set up by the Ministry of Petroleum & Natural Gas to develop a viable and sustainable pricing policy for the four major oil products whose prices are currently administered by the Government. Domestic Prices of Petroleum Products are derived from different levels of prices of the Indian Basket of Crude Oil by the Kirit Parekh Committee.

At the current levels of crude oil price, assume an average of USD 70 a barrel, the OMCs are losing Rs 3.35 per litre on sale of petrol, Rs 2.5 on diesel. This, is reportedly resulting in a total loss of around Rs 43,000 crore for the three PSU OMCs.

If the recommendations of the committee are approved in the Cabinet, it will lead to NIL under-recoveries for the oil marketing companies and the entire burden will fall on the shoulders of the consumers.

Categories: Crude Oil & Petroleum
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