Price crash brings no relief: Oilcos keep fuel prices unchanged for 40 days
NEW DELHI, April 25: This is one reform initiative of the government that has not yielded the desired results on ground. A collapse in global crude oil prices was widely believed to provide relief to consumers by way of sharply lower retail price of petrol and diesel. But the reality has turned out to be something else.
The auto fuels today maintain almost the same price levels at pumps that was existing on March 14, when government raised the excise duty on petrol and diesel by Rs 3 per litre on the back of a single day more than 30 per cent fall in crude to $35 a barrel.
Since then (March 14) , crude prices has fallen by another 40-50 per cent with Indian basket of crude hovering around $20 a barrel now, but retail prices of petrol and diesel has not fallen to provide relief to consumers in time of Covid-19 outbreak.
On March 14, when crude prices were around $35 a barrel, even after factoring in the higher cost, petrol prices stood at Rs 69.87 a litre and diesel Rs 62.58 in Delhi. On Saturday, retail price of petrol is almost at same level at Rs 69.59 a litre and diesel at Rs 62.29 a litre in Delhi, when Indian basket of crude is hovering around $20 a barrel.
In fact, oil companies have not revised petrol and diesel prices since March 16 in complete contravention of policy reforms and daily price revision mechanism where petrol and diesel retail prices changed every day.
"A $15 per barrel fall in crude prices since mid-March should have resulted more than Rs 5 per litre price drop for petrol and diesel. But it seems oil companies are still providing themselves cushion for holding back increase when government raised excise duty on products last month and anticipating a further increase in future now," said a former top executive of public sector oil marketing asking not to be named. Oil companies are also facing a 50 per cent slump in sales of product due to lockdown that has started affecting their financials.
Analysts estimate that petrol and diesel prices fall by roughly 40 paisa per litre with each $1 per barrel fall in crude prices. - IANS
