One thing that Indian motorists have been waiting to hear for long time has finally come up in discussion . Union Petroleum Minister Hardeep Singh Puri said on Thursday that fuel prices could actually come down within next two to three months . But there is one big condition attached to that.
And that condition is basically this — global crude oil prices need to keep falling consistently . Not just for few days,but for several consecutive weeks . Only then will government start thinking about passing benefits to consumers.
Minister explained something interesting about why prices haven't dropped already despite international crude cooling down . Turns out,oil marketing companies are still selling fuel that was purchased at much higher rates during peak of West Asia crisis . So inventory lag is real and significant right now.
And financial damage from that period is honestly not small . Oil Marketing Companies collectively reported losses of ₹74,781 crore for the period ending June 30 . That happened because petrol,diesel and LPG were being sold below actual procurement costs to protect consumers from global price volatility.
Few key things worth understanding about this situation:
- During peak of conflict,global oil prices had crossed $110 per barrel while India limited petrol price hikes to only 5.58% compared to 35% increases seen in neighboring countries.
- Fuel being processed and sold today was actually purchased nearly two months ago at those peak market rates,creating this inventory lag effect.
- All 1,07,000 retail outlets across India stayed fully operational between February 28 and end of June without any supply shortages or dryouts .
Now about Nayara Energy's recent price cut — Puri was very clear about putting that move in proper context . On July 1,Nayara Energy reduced petrol prices by ₹5 per litre and diesel by ₹3 per litre . But minister pointed out this was simply reversal of earlier hikes,saying "Nayara has reduced the price of Petrol because it had increased it by ₹5 per litre during the crisis period." State-run OMCs had not made those steep increases in first place.
The broader situation started stabilizing after diplomatic breakthrough between United States and Iran happened in late June . That agreement helped calm down market that had been under serious pressure for months.
So where does that leave ordinary person filling fuel at pump right now . Government is watching crude prices carefully and Ministry of Petroleum and Natural Gas will evaluate passing on benefits to public only if current downward trend actually sustains . There is no firm commitment yet.
And honestly,the language being used — "evaluate possibility","if trend persists","contingent on trajectory" — all of it sounds cautious for good reason . OMCs absorbed enormous losses protecting consumers during crisis period . Before prices go down,those under-recoveries need some recovery too .
Which creates real question that nobody is answering directly right now . When exactly does consumer benefit,and when does company recovery come first…
