Amid the ongoing tensions between the United States and Iran, crude oil prices have once again breached the USD 100 per barrel mark. It had earlier reached USD 120 per barrel but briefly eased amid ceasefire talks, but remained volatile as the Strait of Hormuz remains largely closed. Amid this, a report surfaced claiming that due to the rising oil prices, Indian refineries are now incurring a monthly loss of Rs 27,000 crore. It said that as refineries are unable to sustain these losses for long, petrol and diesel prices could soon rise by Rs 25-28 per litre. However, the government has termed these reports ‘mischievous and misleading’, saying that these news items are designed to create fear and panic amongst the citizens.
Here’s what the report claimed
The report said that petrol and diesel prices may increase once the Bengal and Tamil Nadu assembly elections are over. The gap between what India pays for crude oil and the rate at which it is supplied to consumers has widened so much that refineries or the government can no longer afford it.ย Despite the high prices in the global crude oil market, retail prices of petrol and diesel in India have remained stable. This is due to the election season. For Indian consumers, fuel price increases are the most direct and sensitive, affecting every citizen.
The report said that the Rs 25-28 price hike won’t happen all at once. To protect the public from shock and keep inflation under control, a staggered approach could be adopted. That is, prices could be raised in instalments over weeks or months.
Mischievous and Misleading
The Ministry of Petroleum and Natural Gas said that there is no such proposal under consideration by the Government.
“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.ย Such news items are designed to create fear and panic amongst the citizens and are mischievous and misleading,” the ministry said in a post on X.ย
The ministry also stressed that India is the only country where petrol and diesel prices havenโt increased in the last 4 years.ย
“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 government has taken some steps to reduce the losses of oil market companies (OMCs). It has cut excise duty by Rs 10 per liter and the windfall tax on exports has been reinstated.ย