When will gasoline and diesel become cheaper? Petroleum Minister Hardeep Singh Puri responds amid cooling Brent | Today’s news
With Brent oil prices cooling, all eyes are on petrol and diesel prices and the next move by domestic sellers. The easing of tensions in West Asia and the US and Iran’s progress in peace talks towards a lasting deal can be attributed to the recent softening in international energy markets. Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Thursday gave an answer to the most vexing question on fuel price as the masses await a cut in petrol and diesel prices.
At the press conference, Puri provided crucial context regarding the financial situation of state-owned oil marketing companies (OMCs). Indicating that any future adjustment in petrol and diesel prices depends on international prices, he said: “If it’s a question of when do you spread the prices? Well, they (OMCs) still have inventory that was bought at a higher price with higher insurance, higher freight rates. If that (low oil prices) continues for the next two, three months, then that would be a legitimate question.”
Responding to further questions about the fuel price revision, he added: “If oil prices remain at these levels for the next few weeks, a reduction in petrol and diesel prices will be a legitimate question for everyone to ask. But what the situation will be after that, it is not right for me to speculate.”
According to the petroleum minister, oil retailers have suffered losses and insufficient yield ₹74,781 crore in the June-end quarter by selling petrol, diesel and LPG below cost, which means both the actual loss and under-recovery are very high. He pointed out that OMCs are still processing oil bought at the height of the war in West Asia and clarified that oil companies usually buy oil at least two months in advance, which serves as raw material for fuel production.
The diesel minister defends the Centre’s decision to revise fuel prices
So the fuel that is currently being processed and produced was essentially bought in April or early May, at the peak of the rise in oil prices. Defending the Centre’s decision against revising fuel prices immediately, Puri said petrol prices rose only 5.58% in India, while they rose 20% in developed countries and 35% in India’s neighboring countries during the recent spike in oil prices.
Since the US and Iran signed a 14-point memorandum of understanding on June 17, Brent oil prices have extended their decline despite brief swings during a period of renewed strikes. Amid the oversupply, Brent crude touched a four-year low of around $70.37 a barrel on Thursday as flows through the Strait of Hormuz resumed and returned to pre-war levels. On July 3, Brent rebounded to trade around $72 per barrel. The global benchmark was in contango, posting its worst quarter since 2020 after hitting a four-year high of $126.41 on April 30.
Hardeep Singh Puri also addressed specific consumer concerns about ambient E20 gasoline (20% ethanol blend) and its impact on vehicle performance. Acknowledging the reduced fuel efficiency in E20 mode, he said, “The range, yes, it might drop a little bit, but the mileage might drop because of different things.”
He went on to note that the compromises are minimal compared to the performance benefits, adding: “Now it’s well known that when you have ethanol, they also use it in race cars. Acceleration increases, knock improves.”
