Petroleum MoS Suresh Gopi apprises Parliament of measures taken to keep fuel prices low

New Delhi [India], July 29 (ANI): The central government has taken several steps to insulate common citizens from high international prices, Minister of State in the Ministry of Petroleum and Natural Gas Suresh Gopi informed Parliament on Monday, as he highlighted several interventions.

In a written reply in Rajya Sabha, the MoS said among the measures were diversifying the crude import basket, windfall taxes on export of petroleum products, invoking the provisions of Universal Service Obligation to ensure availability of petrol-diesel in domestic market, and increasing the blending of ethanol in petrol.

He said that the central government reduced central excise duty by a total of Rs 13 per litre and Rs 16 per litre on petrol and diesel, respectively in two tranches in November 2021 and May 2022, which was fully passed on to consumers.

Some state governments also reduced state value added tax (VAT) rates to provide relief to citizens.

In March, 2024, oil marketing companies also reduced the retail prices of petrol and diesel by Rs 2 per litre each and current retail selling price of petrol and diesel at Delhi is Rs. 94.72 and Rs 87.62 per litre, respectively.

India imports more than 60 per cent of its domestic LPG needs. Prices of LPG in the country are linked to its price in the international market.

Minister Gopi said the government continues to modulate the effective price to consumer for domestic LPG.

During the period 2020-21 to 2022-23, the average Saudi CP, which is the international benchmark for LPG pricing, went up from USD 415 per tonne to USD 712 per tonne.

However, the increase in international prices was not fully passed on to the customers, he claimed.

“Under PAHAL Scheme, the domestic LPG cylinders are sold at non-subsidised price and the applicable subsidy to the consumers is transferred directly into their bank accounts. Apart from the direct subsidy to consumers, the oil marketing companies have also been compensated Rs 22,000 crore in 2022-23 by Government of India to cover the under-recoveries suffered by them in not passing on the high international LPG prices to the domestic LPG consumers,” the Gopi said in his written reply.

From May 21, 2022, the government has been providing a targeted subsidy of Rs 200 per 14.2 kg LPG cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for up to 12 refills a year.

The government reduced the retail selling price of domestic LPG by Rs 200 per 14.2 kg LPG cylinder with effect from August 30, 2023.

Moreover, on October 5, 2023, the government increased the targeted subsidy to Rs 300 per 14.2 kg LPG cylinder for all Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries.

The government further reduced the retail selling price of domestic LPG by Rs 100 per 14.2 kg cylinder effective March 9, 2024.

The current rate of domestic LPG in Delhi is Rs 803 per 14.2 kg cylinder. With a targeted subsidy of Rs 300 per cylinder, the effective cost for Ujjwala consumers is Rs 503 per 14.2 kg cylinder (in Delhi).