Petrol, diesel price cut only if crude oil prices remain low, hints Puri

Mangalore Today News Network

New Delhi, Jul 3, 2026: Despite international crude oil prices falling to a four-month low, petrol and diesel prices in India are unlikely to be reduced immediately, Union Oil Minister Hardeep Singh Puri said on Thursday. He explained that state-run oil marketing companies are still refining costlier crude oil purchased during the peak of the West Asia conflict.

Retail fuel prices were increased by around Rs 7.50 per litre for both petrol and diesel in the second half of May, more than two months after the conflict began. However, the hike did not fully reflect the sharp rise in global crude prices, forcing Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) to absorb a large share of the increased costs.

According to Puri, the three state-owned fuel retailers together incurred losses of Rs 74,781 crore on the sale of petrol, diesel, and subsidised LPG. The losses include selling petrol and diesel below cost for four months following the outbreak of the West Asia conflict on February 28, as well as unrecovered subsidies on domestic cooking gas.

Global crude oil prices have declined significantly over the past few weeks after the United States and Iran reached an interim peace agreement, easing concerns over disruptions in the Strait of Hormuz, a vital route for global oil shipments. Crude prices have fallen from a peak of around USD 119 per barrel during the conflict to nearly USD 70 per barrel.

However, Puri noted that Indian refiners are currently processing crude oil purchased nearly two to two-and-a-half months ago, when prices, freight charges, and insurance costs were substantially higher.

"The crude being refined today was bought when prices, freight, and insurance costs were high. Lower-priced crude purchased now will reach refineries only after some time," he said.

The minister added that a reduction in retail fuel prices could be considered if international crude prices remain at current lower levels for a sustained period.

"If oil prices continue to remain at these levels, reducing retail fuel prices would be a legitimate step," Puri said.

Commenting on Nayara Energy’s recent decision to cut petrol prices by Rs 5 per litre and diesel by Rs 3 per litre, Puri said the private retailer was effectively reversing the price hikes it had introduced earlier during the conflict. He noted that Nayara had matched every fuel price increase implemented by state-owned companies in May, and its latest reductions have aligned its prices once again with those of public sector retailers.

Puri also highlighted India’s efforts to maintain uninterrupted fuel supplies during the four-month disruption caused by the West Asia conflict. He said refiners diversified crude imports by sourcing oil from multiple regions and increased LPG imports from the United States.

As a result, no fuel shortages were reported across the country, unlike in some neighbouring nations where fuel rationing was introduced.

"Every refinery, port, terminal, pipeline, and depot is well stocked. We currently have enough fuel reserves to meet the country’s requirements for 76 to 80 days," he said, adding that the government plans to further expand India’s strategic petroleum storage capacity.

On the outlook for oil prices, Puri said the government remains cautious and is focused on strengthening energy security by increasing storage infrastructure and expanding partnerships with global energy suppliers.