In response to expectations for a reduction in petrol and diesel prices due to softening international oil rates, Oil Minister Hardeep Singh Puri stated on Wednesday that the global market is currently in a “highly turbulent” situation. Puri emphasized that the market needs to stabilize before considering any cuts in fuel prices. Three major state-owned fuel retailers—Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL)—which control about 90% of the market, have maintained a freeze on petrol and diesel prices for a record 21 consecutive months.
Despite the surge in crude oil prices last year leading to heavy losses in the first half of the 2022-23 fiscal year, the fuel retailers achieved profitability in the last three quarters after easing rates. Puri clarified that there have been no discussions with the oil marketing companies regarding a reduction in fuel prices. He highlighted that the decision on fuel pricing lies with the oil companies themselves.
Puri explained that the global situation is highly volatile, citing conflicts in the Russia-Ukraine war and the Israel-Hamas conflict, leading to attacks on cargo ships in the Red Sea. He noted that 12% of global shipping traffic, 18% of oil, and 4-8% of LNG trade pass through the Red Sea and the Suez Canal. Any disruption in this region could have significant impacts on global markets.
“In a highly volatile situation, our primary responsibility is to ensure availability and affordability,” Puri stated, emphasizing the careful navigation of the current challenges. He highlighted that oil companies do not seek government approval for price revisions and expressed hope for normalcy without turbulence.
While oil companies are currently making some profit on petrol and diesel at current prices, the situation is described as “touch-and-go” in recent weeks, with fluctuating trends. Puri urged caution, emphasizing the importance of stability in the face of unpredictable global events affecting oil prices.
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