The central government plans to reduce petrol & diesel prices soon. Media reports claim this move would provide relief before the 2024 Lok Sabha elections.

Our affiliate website, Wion, reports that they could announce cuts of more than 8 rupees a litre, according to their reports.

An announcement could come before the year is out. The Petroleum Ministry is currently drafting a proposal for approval by the Prime Minister, which could pass soon after being sent for review.

Government Oil Companies Made Huge Profits

Since April 6, 2022, government oil companies have not altered fuel prices before the refinery. Three government oil companies – Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) & Hindustan Petroleum Corp (HPCL) have seen huge profits thanks to low crude oil prices during this financial period; together, they earned a combined net profit of 58.198 crore rupees during the first half of this fiscal year.

What Are The Petrol Prices?

The price of a litre of gasoline in the capital city of Delhi is currently 96.72 Rupees. Rajasthan has a price of 109.34. Petrol costs 97.31 rupees in Haryana, 97.05 in UP and 98.45 in Punjab.

Diesel is 89.62 rupees per litre for Delhi, 90.16 for UP, 88.57 for Punjab, and 90.16 for Haryana. The people will be greatly relieved if petrol and diesel prices are reduced.

The Prime Minister Has Yet To Approve A Rs 8-10 Per Litre Reduction Proposal

According to sources, the Petroleum Ministry is currently drafting a proposal proposing cuts of between Rs 8-10 per litre on petrol and diesel in response to the dramatic decrease in crude prices imported into India. These substantial reductions can be attributed to this dramatic fall in import costs.

Fiscal Gains and Implications for Politics

Crude oil prices have significantly declined this fiscal year, averaging $77.14 per barrel. Government-run oil firms like Indian Oil Corp.

Bharat Petroleum Corporation and Hindustan Petroleum Corporation saw significant profits during the first half of 2014.

Price cuts may help offset losses from previous fiscal years caused by high oil prices while providing an early election strategy to negate claims by the opposition that inflation is an essential feature of government policies.

Background and Previous Relief Measures

In May 2022, the central government will reduce Central Excise Duty on petrol and diesel to combat inflation. A reduction of Rs 8 per litre and 6 per kilogram for each has had an immediate impact on the Wholesale Price Index.

Oil companies that had suffered substantial losses are now turning a profit; this may signal a shift in politics as well as economic relief for consumers who are currently dealing with sky-high fuel costs.

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