Union Petroleum and Natural Gas Minister Hardeep Singh Puri said petrol and diesel prices could be reduced if international crude oil prices remain low.
This potential reduction would provide significant relief to Indian consumers and transport sectors, provided that global market volatility does not erase current gains.
Crude oil prices have recently slipped to a four-month low [1]. Puri said that if crude oil prices remain at current levels for the next two to three months, petrol and diesel prices can come down [2]. This window allows the government to monitor the stability of the global market before adjusting retail rates.
However, the minister said Oil Marketing Companies (OMCs) are not yet benefiting from the current price drop. He said OMCs are still selling fuel refined from costlier crude bought during the West Asia conflict [3]. This lag in the supply chain means that the cost of current inventory remains high despite the dip in spot prices.
Financial pressures on the fuel sector also persist. Puri said cumulative under-recoveries have climbed to about ₹2.19 trillion [4]. These under-recoveries occur when the cost of procuring and refining crude exceeds the retail price at which the fuel is sold to the public.
Lowering prices would be possible if global trends continue, allowing the government to protect consumers after previous excise-duty cuts, and increases in refining capacity [5]. The timeline for a potential review is set for two to three months [2].
“"If crude oil prices remain at current levels for the next two to three months, petrol and diesel prices can come down."”
The delay in reducing fuel prices reflects the 'lag effect' of crude oil procurement, where OMCs must clear expensive inventory before lower global prices can be passed to consumers. With under-recoveries exceeding ₹2 trillion, the government is balancing the need for consumer relief against the financial solvency of state-run oil companies.
