New Delhi, June 18: Even as global crude oil prices eased on Thursday amid signs of reduced tensions in West Asia, the Centre indicated that consumers should not expect an immediate reduction in petrol and diesel prices, arguing that domestic fuel rates are influenced by a range of logistical and market-related factors beyond international benchmark movements.
Addressing reporters in New Delhi, Minister of State for Petroleum and Natural Gas and Tourism Suresh Gopi said a decline in crude oil prices does not automatically result in an instant cut in fuel prices across the country. He said crude purchased at lower rates takes time to reach India, and the benefits of softer international prices cannot be passed on immediately.
According to the minister, transportation timelines remain a significant factor in determining when lower crude costs could potentially affect domestic fuel pricing. He noted that crude oil shipments destined for India pass through the Strait of Hormuz and that heavy maritime traffic in the region could further influence delivery schedules.
“It will take time as the cheaper crude has to be transported to India via the Strait of Hormuz, which will see excessive ship traffic. Things will have to be normalised,” Gopi said.
The minister also pointed to the impact of volatility in global energy markets following the conflict in West Asia earlier this year. He said oil marketing companies faced considerable pressure as crude prices fluctuated during the period.
Gopi stated that the government had absorbed a substantial portion of the burden arising from elevated crude oil prices in an effort to shield consumers from the full impact of the increase. He said this intervention resulted in a revenue loss of Rs 12,000 crore for the Centre.
“By absorbing the impact, the government lost Rs 12,000 crore. None of the states reduced their revenue by charging lower duties on higher fuel prices. The central government has to run and the oil companies have to survive,” he said.
The minister maintained that domestic fuel pricing is shaped by multiple variables and cannot be linked solely to changes in international crude oil benchmarks. He said market conditions, transportation considerations and the financial sustainability of oil marketing companies are among the factors taken into account while determining fuel prices.
His remarks came on a day when international crude oil benchmarks registered losses. Brent crude, the global benchmark, was trading about 1.64 per cent lower at around $78 per barrel, while US West Texas Intermediate crude declined nearly 2 per cent to approximately $75 per barrel.
The fall in crude prices followed progress in diplomatic efforts aimed at reducing tensions in West Asia, a region that plays a critical role in global energy supplies and shipping routes.
Despite the easing in global oil prices, the Centre’s position indicates that any potential impact on domestic petrol and diesel rates will depend on how broader market, logistical and supply-chain factors evolve in the coming weeks.
