Oil minister Dharmendra Pradhan: Government won't intervene to cut petrol, diesel prices

Oil minister Dharmendra Pradhan: Government won't intervene to cut petrol, diesel prices

Oil minister Dharmendra Pradhan: Government won't intervene to cut petrol, diesel prices

"The government can not change fuel pricing on a knee-jerk basis", Pradhan told reporters here, noting that global crude oil prices had recently gone up as much as 15% owing to production being hit in the USA owing to the impact of multiple hurricanes.

The prices are revised every day based on crude price movements.

Minister of Petroleum & Natural Gas Dharmendra Pradhan today said the Government will adopt immediate measures to check the price of petroleum products. In an advanced economy, the pricing of retail fuel is best left to a formula-driven transparent method, and not knee-jerk reactions, he added.

The news reports of a possible government intervention to keep the retail fuel prices in check came in the wake of petrol and diesel prices rising to hit three-year highs in some cities, only, without the people noticing it much this time.

The spike in global crude oil prices is testing the government's resolve to continue on the path of complete deregulation of fuel as fiscal deficit restrain New Delhi from rolling back excise duties, while inflation inches up, according to a senior finance ministry official.

Petrol has become costlier by Rs 7 per litre since July, pushing pump prices to their three-year high in cities such as Mumbai as high level of state taxes amplified the impact of rise in global prices.

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Pradhan said that the prices of petrol and diesel would stabilise if brought under the Goods and Services Tax regime.

He claimed that hurricanes Harvey and Irma, which hit the United States over the past month, were responsible for the rise in fuel prices in India. In fact, about half the price paid by the Indian end-consumer for petrol goes towards paying these taxes. In Mumbai, the price rose to Rs 79.48 per litre on September 12 from Rs 76.70 per litre on June 16.

Though global crude and product prices have been rising for some time, the recent spike has been stoked mainly by fears of product shortage in the wake of hurricanes Harvey and Irma knocking out 13% of U.S. refining capacity.

"The petrol and diesel prices are skyrocketing".

Going further, Dharmendra Pradhan also said that with more and more private sector players coming into the fuel retailing business, the sector will see more efficiencies from increased competition, leading to lower prices for the consumers. The government's excise duty collection, for instance, has more than doubled during the period 2014-17, from Rs. 99,184 crore to Rs. 2,42,691 crore.

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