India has ensured availability of petrol and stability in prices while “navigating” global challenges “quite well”, Union Minister for Urban Affairs, Housing, Petroleum and Natural Gas, Hardeep Singh Puri, said on Friday. The Minster also indicated that there may not be any immediate price cuts by oil marketing companies (OMCs).

According to him, India is perhaps the only country in the world where petrol prices at bunker levels have gone down. But with crisis in the Red Sea, there is a shoot-up in insurance and freight costs. Nearly, 85 per cent of India’s daily petrol and diesel consumption of 5 million barrels are met from imports, and as such the sector is not immune from global events and their shocks.

He did not directly answer if there would be a price cut in retail prices of diesel and petrol, but categorically mentioned oil marketing companies had not raised retail prices previously when there were under-recoveries.

“The global situation remains ever changing. We heard reports of an oil bunker being seized by a country. The Red Sea crises continues. So the freight and insurance costs are shooting up. Now in a situation like this we have maintained stability. Also you have to give credit to the fact that India is the only country in the world where petrol prices at bunker levels have come down,” Puri said.

Reports suggest that Iran seized a tanker with Iraqi crude destined for Turkey on Thursday in retaliation for the confiscation last year of the same vessel and its oil by the U.S. The seizure of the Marshall Islands-flagged St Nikolas coincides with weeks of attacks by Yemen’s Iran-backed Houthi militias targeting Red Sea shipping routes.

According to the bureaucrat-turned-politician, making mid-to-long term strategies look difficult when the situation changes with in a matter of days. “The picture at beginning of the week and by the end of the week changes (drastically). So calling for policy decisions based on such an ever changing scenario is not easy,” Puri said.

Retail prices are determined by a multitude of factors like global crude oil prices, cost of insurance and freight, refining margins and taxes by the Central and state governments.

Puri mentioned that the start of petroleum production from the ONGC’s deep-water block in the Bay of Bengal, off the coast of the Krishna-Godavari basin.

“You must appreciate that whatever be the situation, we (India’s government) always ensured availability and affordability for petrol and diesel,” he said adding that any change in retail prices will continue to be based on global market and other related factors.

Related Topics
comment COMMENT NOW