NEW DELHI: The center has proposed to reduce the price of petrol and diesel by two rupees, according to recent report. The report states that instructions have been given to three public-sector oil companies in this regard.
The move to reduce the price is taking place in the context of falling crude oil prices in the global market. For the first time since 2021, the price of Brent crude oil fell below 70 dollars but it is not clear from when the fuel prices will come down.
Fuel prices were reduced in March last year ahead of the Lok Sabha elections. Since then, crude oil prices have come down several times but the government was not ready to reduce fuel prices. In most of the states including Kerala, the price of petrol is above Rs 100 per litre. The price of diesel is also around one hundred rupees. Lower fuel prices will lead to lower inflation.
Economic slowdowns in China and the United States are reducing oil consumption. Crude oil was not supported by the news of lower oil reserves in the United States and the decision by OPEC countries to curb production. This has improved the refining margin of public sector companies. Companies have been in dire straits for more than a year as oil prices have remained close to $90. Petroleum dealers say that with the fall in crude oil prices, it is a favourable situation to reduce the prices of petrol and diesel.
India is the third largest oil importer globally. More than 87 percent of the demand is dependent on foreign sources. India is trying to buy crude oil from the cheapest suppliers, including Russia.
