Indian Oil Corporation Ltd. has kept prices of petrol and diesel unchanged as it expects the recent surge in crude prices to be a temporary phenomenon.
IOC and other state-owned oil companies are holding back on price hikes in the interest of customers, Chairman and Managing Director Sanjiv Singh said on the sidelines of an event in New Delhi today. “Global prices are not supported by fundamentals. Some geopolitical issues are flaring up the prices and they will not last permanently.”
IOC, Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd. have not revised petrol and diesel prices since April 24, according to information on their websites. During this time, Brent crude prices have risen 2.3 percent while WTI crude climbed to $70 per barrel as U.S. President Donald Trump considers pulling out of the Iran nuclear deal.
The Narendra Modi administration had asked state-run retailers not to increase petrol and diesel prices and absorb a part of the losses due to the recent recovery in global crude oil, Bloomberg reported earlier. The government wants to keep prices in check to shore up popular support ahead of assembly elections in Karnataka on May 12. India imports more than 80 percent of its annual crude oil requirement, and wants to see prices at about $50 per barrel in order to manage its finances better, Oil Minister Dharmendra Pradhan had said in an interview.
Petrol and diesel price remain unchanged today in Delhi with petrol at Rs 74.63 per litre and diesel at Rs 65.93 per litre.
Oil marketing companies revise petrol and diesel price daily on the basis of global crude oil prices since the dynamic pricing formula introduced in June this year.
“We have all the freedom to spike the prices and vary it on a daily basis which can unnecessarily create panic in the market. But we are not doing that in the interest of the consumer,” Singh said. “However, we will pass it on eventually to recover losses in a phased manner,” he added.
The government has, on several occasions, ruled out the excise duty cut option on fuel, and states too are reluctant to trim the value added tax levied on these products.