Petrol, diesel price cut possible if crude oil stays low for 2-3 months: Hardeep Puri
Oil Minister says retail fuel prices reflect earlier high-cost crude purchases; OMCs continue to face under-recoveries of Rs 2.10 lakh crore, including LPG, during January-June.
Lower crude oil prices could pave the way for a reduction in petrol and diesel prices if the trend continues over the next two to three months, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Wednesday.
Speaking on the outlook for retail fuel prices, Puri explained that the fuel currently being sold at petrol pumps was refined from crude oil purchased earlier when international prices were significantly higher. As a result, the benefit of the recent decline in global crude prices has not yet been fully reflected in retail rates.
"If lower crude prices persist for the next two to three months, the window for a retail price cut will open up," the minister said.
Puri also highlighted the financial pressure on state-owned oil marketing companies (OMCs), noting that they continue to absorb under-recoveries despite the moderation in crude prices.
More from BusinessAccording to the minister, total under-recoveries incurred by OMCs between January and June, including losses on domestic LPG sales, stood at around Rs 2.10 lakh crore.
The remarks come amid expectations that softer global crude oil prices could eventually provide relief to consumers, although any reduction in retail fuel prices will depend on the sustainability of lower crude prices and the financial position of oil marketing companies.
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