Petrol, diesel price reduction only when oil rates stabilise at lower levels, hints Puri

International crude oil prices may have fallen to a four-month low, but retail petrol and diesel prices in India are unlikely to be cut anytime soon as state-run refiners are still processing costlier crude purchased during the peak of the West Asia crisis, Oil Minister Hardeep Singh Puri said.

Petrol and diesel prices were raised by about `7.50 per litre each in the second half of May—more than two months after the outbreak of the West Asia conflict and by less than the increase in global fuel costs—resulting in state-owned fuel retailers absorbing a significant portion of the higher crude prices.

The delayed and partial pass-through left Indian Oil Corp (IOC), BPCL and HPCL with substantial losses on the sale of petrol and diesel, even as international oil prices have since retreated.

Puri said state-owned fuel retailers incurred cumulative losses of `74,781 crore on the sale of petrol, diesel and subsidised cooking gas (LPG). The figure includes losses from selling petrol and diesel below cost for four months following the outbreak of the West Asia conflict on February 28, as well as unrecovered LPG subsidies for the same period and earlier months.