Global crude down 2/3rd since May '14; petrol falls only 16%

New Delhi: A litre of petrol cost Rs 71.41 in May 2014 when international oil was at USD 106.85 per barrel but even after over two-third fall in global rates, the price of petrol has witnessed only 16 percent decline and remains at Rs 60 per litre.

In a written reply to a question in Rajya Sabha, Oil Minister Dharmendra Pradhan on Wednesday said the basket of crude oil that India buys averaged USD 106.85 per barrel in May 2014 and this month it is averaging at USD 29.80.

Petrol in May 2014, when BJP-government took office, was priced at Rs 71.41 per litre and now it is priced at Rs 59.95 a litre, he said.

Similarly, diesel cost Rs 55.49 a litre in May 2014 and this month it is available at Rs 44.68 per litre.

Pradhan said since May 2014 the government has raised excise duty on petrol by Rs 12 per litre and by Rs 13.77 a litre on diesel.

Excise duty on petrol on May 1, 2014 was Rs 9.48 per litre and today it is Rs 21.48 a litre. Similarly, the same on diesel was Rs 3.56 a litre and this month it is Rs 13.77 a litre.

While the price reduction in petrol between May 2014 and February was Rs 11.46 per litre, the government mopped up Rs 12 a litre in excise duty.

Similarly, the reduction in diesel price has been Rs 10.81 a litre but excise duty has risen by Rs 13.77 per litre.

"Retail selling price (RSP) of petrol and diesel in the country are based on their respective international prices and oil marketing companies (OMCs) are at present applying Trade Parity Pricing methodology to compute the RSP," Pradhan said.

Other cost elements in the RSP of petrol and diesel viz excise duty, BS-IV premium, marketing cost and margins are specific costs which do not increase/decrease with the volatility in international prices, he said.

"The element of excise duty which is specific in nature has been increased," he said, adding that most of the state governments also have increased VAT on petrol and diesel.

Prices of petrol and diesel have been made marked determined effective June 26, 2010 and October 19, 2014, respectively.

"Since then, the public sector oil marketing companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with their international price and other market conditions," he added.