Petrol, diesel prices cut even as global crude surges, Govt tells Lok Sabha

Union Petroleum and Natural Gas Minister Hardeep Singh Puri told Parliament on Thursday that retail fuel prices in India have declined from their 2021 highs despite global crude oil volatility, as the government and public sector oil companies adjusted duties and rationalised freight costs to cushion consumers.

Responding to a starred question in the Lok Sabha, Puri said domestic petrol and diesel prices have come down in recent years, supported by government interventions and pricing decisions taken by Public Sector Oil Marketing Companies (OMCs).

The Minister underlined that fuel prices in India remain market-driven and are aligned with international trends, with India importing more than 85% of its crude oil requirement. Crude oil prices in the Indian basket rose sharply from $55 per barrel in March 2015 to $113 per barrel in March 2022, peaking at $116 per barrel in June 2022 due to geopolitical tensions. However, retail prices in Delhi have eased to ₹94.77 per litre for petrol and ₹87.67 per litre for diesel, compared to ₹110.04 and ₹98.42 per litre, respectively, in November 2021.

To provide relief to consumers, the Centre reduced excise duty by ₹13 per litre on petrol and ₹16 per litre on diesel in November 2021 and May 2022. Several states also reduced VAT to cushion consumers from high global prices. In March 2024, OMCs cut fuel rates by ₹2 per litre each, while in April 2025, the Centre raised excise duty by ₹2 per litre each on petrol and diesel, though this was not passed on to consumers.

Public sector OMCs have also undertaken intra-state freight rationalisation, lowering prices in remote regions and reducing the gap between maximum and minimum fuel prices within states. The government, Puri said, has further diversified India’s crude import basket, ensured uninterrupted domestic supply under the Universal Service Obligation, and stepped up domestic exploration and production to mitigate risks from global oil shocks.

The Minister also highlighted India’s energy transition efforts, pointing to the rapid adoption of ethanol blending and alternative fuels. Under the National Policy on Biofuels, the target of 20% ethanol blending in petrol, initially set for 2030, was advanced to 2025-26. As of July 31, 2025, OMCs had achieved an average ethanol blending of 19.05% during the current Ethanol Supply Year, with July alone recording 19.93%.

Puri said the government is actively encouraging CNG, LNG, hydrogen, biofuels, and electric mobility to build a cleaner and more sustainable energy ecosystem. Programmes such as the Ethanol Blended Petrol (EBP) initiative, biodiesel blending, and the SATAT scheme for Compressed Bio Gas are already underway.

To boost rural participation and biofuel capacity, initiatives like the Pradhan Mantri JI-VAN Yojana for second-generation ethanol, interest subvention for distillation expansion, and production of bio-manure from waste and biomass are being implemented.

According to Puri, India’s long-term strategy is to strike a balance between conventional energy security and the adoption of renewable alternatives, ensuring citizens are protected from global crude shocks while accelerating the transition to a cleaner energy future.