State-owned oil companies reduced petrol and diesel prices by Rs 2 per litre each, marking the end of a nearly two-year hiatus in rate revision.
The oil ministry announced that starting from 6 am on Friday, March 15, revised petrol and diesel prices will come into effect. In the national capital, petrol will be priced at Rs 94.72 per litre, down from Rs 96.72, while diesel will cost Rs 87.62, down from Rs 89.62.
The government had deregulated petrol and diesel prices nearly a decade ago, but until now, rates were set by oil companies. However, ahead of the upcoming general elections, the Ministry of Petroleum and Natural Gas announced the rate revision on Thursday.
A week prior to this price cut, the LPG cooking gas rates saw a reduction of Rs 100 per cylinder. This brought down the cost of a 14.2-kg cylinder to Rs 803 for regular users and to Rs 503 for beneficiaries of the Ujjwala scheme, after considering the government’s subsidy of Rs 300 per cylinder.
The Oil Marketing Companies (OMCs) announced that they have adjusted the prices of petrol and diesel nationwide, effective from 15th March 2024, 06:00 AM.
In Mumbai, petrol will be priced at Rs 104.21 per litre, Rs 103.94 in Kolkata, and Rs 100.75 in Chennai. Diesel will cost Rs 92.15 in Mumbai, Rs 90.76 in Kolkata, and Rs 92.34 in Chennai.
Fuel prices vary across states due to differing local tax rates. Taxes are highest in BJP-ruled Maharashtra and lowest in Delhi. The price reduction will benefit consumer spending and lower operating expenses for millions of vehicles, the ministry stated.
The lowered petrol and diesel prices will positively impact citizens by providing them with increased disposable income, fostering growth in tourism and travel sectors, curbing inflation, boosting consumer confidence and spending, reducing operational costs for transportation-dependent businesses, improving profitability for logistics, manufacturing, and retail industries, and cutting expenses for farmers on tractor operations and pump sets.
The statement also noted the volatility of international oil prices in recent years, including a dip into negative territory at the onset of the pandemic in 2020 and significant fluctuations in 2022, with prices reaching a 14-year high of nearly $140 per barrel in March 2022 following Russia’s invasion of Ukraine, before declining due to reduced demand from major importer China and concerns about economic slowdown.
However, for a country heavily reliant on imports (85%), the surge exacerbated existing high inflation levels and disrupted the post-pandemic economic recovery.
Consequently, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) refrained from adjusting petrol and diesel prices, marking the longest period of price stability in the past two decades.
They halted daily price adjustments in early November 2021 due to record-high rates nationwide, leading the government to partially reverse the excise duty increase implemented during the pandemic to capitalize on low oil prices.
The freeze persisted into 2022, but the surge in international oil prices due to the Russia-Ukraine conflict led to a Rs 10 per litre hike in petrol and diesel prices from mid-March 2022.
Subsequently, another round of excise duty cuts reversed the entire Rs 13 per litre and Rs 16 per litre tax increase on petrol and diesel implemented during the pandemic. This was followed by the current price freeze, which commenced on April 6, 2022, and will conclude with a rate revision effective Friday.
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