India: Change in the Price of Petrol and Diesel Vis-A-Vis International Market

OREANDA-NEWS. The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the details of reduction in Retail Selling Price (RSP) of Petrol and Diesel in April 2015, at Delhi, as per Indian Oil Corporation Limited (IOCL) is as under:

The prices of Petrol and Diesel were made market determined effective 26^th June, 2010 and 19^th October, 2014 respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on price of these products in line with changes in the prices in international market and market conditions.  OMCs have not only increased but also decreased the price of Petrol and Diesel in line with changes in the international prices and other market conditions.

The Refinery Transfer Price (RTP) of Petrol and Diesel constitute around 48% and 61% of their Retail Selling Price respectively. Many of the remaining cost elements viz. Excise Duty, BS IV premium, marketing cost and margins etc. are specific costs which do not increase/decrease with the variation in international price of Petrol and Diesel. The RTP of Petrol has reduced by Rs. 16.69 per litre from 1^st Fortnight of July 2014 to 1^st Fortnight of May 2015. After taking into account the increase in Excise Duty amounting to Rs. 7.98 per litre, the OMCs have reduced the Retail Selling Prices by Rs. 10.44 per litre. Similarly, the RTP of Diesel has reduced by Rs. 17.64 per litre from 1^st Fortnight of July 2014 to 1^st Fortnight of May 2015. After taking into account the increase in Excise Duty amounting to Rs. 6.70 per litre, the OMCs have reduced the Retail Selling Prices by Rs. 8.27 per litre. Thus, the major portion of the decrease in RTP has been passed on to the consumers of Petrol and Diesel.