The minister’s statement comes in the wake of OMCs, including the Indian Oil Corporation (IOC), slashing prices of petrol and diesel by Rs. 2, a move that became effective on March 15, 2024.
Any future decisions on further reductions in the prices of petrol and diesel would be taken by the state-run Oil Marketing Companies (OMCs), based on their assessment of market conditions and profitability, Petroleum Minister Hardeep Singh Puri said on Friday.
The minister’s statement comes in the wake of OMCs, including the Indian Oil Corporation (IOC), slashing prices of petrol and diesel by Rs. 2, a move that became effective on March 15, 2024. Puri has described the firms decision as a “courageous move” in the face of the volatile global crude oil market.
The price cut marks the first such adjustment since May 2022, when the government had reduced the excise duty on these fuels, aiming to provide relief to consumers ahead of the general elections.
“The OMCs have demonstrated a strong performance over the last three quarters, and we are optimistic about better financial results in the fourth quarter,” Puri said on the sidelines of the launch of ‘Ethanol 100’ from an Indian Oil outlet here. He highlighted the robust financial health of the sector and its potential to make “independent pricing decisions.”
Alongside this, the IOC took a significant step towards promoting cleaner fuel options by launching E100 petrol pumps, which cater to vehicles running on 100% Ethanol blending in petrol. Speaking at this event, IOC Chairman Shrikant Madhav Vaidya shared insights into the price reduction’s impact, stating, “The price reduction may have some influence, but it is not anticipated to substantially impact profits.” He acknowledged the delicate balance the company maintains between consumer prices and its profitability.
Vaidya further elaborated on the complexities of global crude oil prices and their critical role in shaping the company’s fuel pricing strategy. “It is a very dynamic world; crude oil prices play a critical role. We will wait for the crude oil prices, how they are, once it shows some trend whether it’s stable or volatile, then we will take a call,” he said, indicating a cautious approach to future pricing decisions in response to global market trends.
The recent price reduction lowers petrol prices to Rs. 94.72 per litre and diesel to Rs. 87.62 per litre in Delhi, offering some relief to consumers. This decision follows a period of significant profitability for the sector, with IOC, Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) reporting a combined profit of Rs. 69,000 crore in the first three quarters of the fiscal year. The initiatives signal a commitment to economic stability and environmental sustainability in India’s energy sector.
Source:financialexpress.com