Oil ministry dismisses report on hike in petrol, diesel prices

It said, 'Such news items are designed to create fear and panic amongst the citizens and are mischievous and misleading.'

New Delhi: The Ministry of Petroleum and Natural Gas on Thursday dismissed a report about a possible hike in petrol and diesel prices after the state assembly elections, for which the last voting is scheduled on April 29, saying there is no such proposal under consideration.

“There are some news reports suggesting a price hike of petrol and diesel. It is hereby clarified that there is no such proposal under consideration by the government,” the ministry said in a post on X.

“Such news items are designed to create fear and panic amongst the citizens and are mischievous and misleading,” it said.

The ministry claimed that “India is the only country where petrol and diesel prices haven’t increased in the last 4 years”.

“Govt of India and Oil PSUs have taken relentless steps in order to insulate the Indian citizens from steep increases in international prices,” it added.

The ongoing conflict in West Asia has led to sharp increase in crude oil prices. As a result, retail energy prices have shot up in most of the countries.

However, retail consumers in India have so far been shielded. Following the outbreak of the US-Israel-Iran conflict on February 28, prices of cooking gas, industrial diesel and premium petrol have been hiked. However, prices of normal diesel and petrol remain largely unchanged.

Due to a jump in crude prices, oil marketing companies like Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum are estimated to incur heavy losses on petrol and diesel supplies.

Brokerage firm Kotak Institutional Equities said in a note that diesel and petrol prices might be increased by Rs 25-28 per litre.

“We believe after the state elections (last voting on April 29), and if there is no truce in West Asia, the retail prices will be hiked. Based on an Indian basket of US$120/bbl and low fixed margins (US$8/15 per bbl for petrol/diesel), there is a case to raise prices by Rs25-28/litre," it said.

According to Kotak Institutional Equities, oil marketing companies are losing around Rs 27,000 crore every month due to the jump in crude prices.

“Elevated oil prices warrant commensurate retail fuel price increases to contain refiners’ losses and signal demand moderation,” it said.

Price of Indian crude basket surged from an average of $63 per barrel in January to $113 per barrel in March and to $116 per barrel in April, according to data shared by the Petroleum Ministry.

Speaking at an inter-ministerial briefing on recent developments in West Asia, Joint Secretary in the Ministry of Petroleum and Natural Gas Sujata Sharma said there have been some panic buying of petrol and diesel due to rumours.

“Petrol and diesel are adequately available at retail outlets. However, some instances of panic buying have been observed. I urge people not to believe rumours,” Sharma said.