The government is facilitating discussions between oil marketing companies (OMCs) and dealers to find a fair solution regarding dealer margins, according to Petroleum Minister Hardeep S. Puri.
As of July 29, 2024, Minister Puri announced that India boasts some of the lowest fuel prices globally and is the only country where prices have decreased in the past 2.5 to 3 years. This accomplishment is credited to the bold and forward-thinking decisions of the Hon’ble Prime Minister.
During a detailed response to a starred question in Parliament, Minister Puri provided an overview of the deregulation of petrol and diesel prices in India, dealer margins, and the effects of government policies on fuel costs. He noted that petrol and diesel prices were deregulated in 2010 and 2014, respectively, meaning that prices are now set by the oil marketing companies rather than the government.
Reflecting on past government actions, Puri mentioned that oil bonds worth ₹1,41,000 crores were issued, which now require payments of ₹3,20,000 crores. Despite this, the current government is committed to maintaining fair fuel prices within the constraints of a deregulated market.
Addressing the issue of dealer margins, which was the primary concern of the parliamentary question, Puri explained that these margins are determined through commercial contracts between OMCs and their dealers. He noted that India has 90,639 retail outlets, with 81,000 in the public sector and 9,000 in the private sector, mainly operated by Reliance and Nayara.
Puri assured that the government is facilitating dialogue between OMCs and dealers to reach a reasonable agreement on dealer margins. He emphasized the impact of the Prime Minister’s actions on controlling domestic fuel prices, including two reductions in excise duties that lowered prices by ₹13 and ₹16, respectively, and further reductions in VAT by BJP-governed states.
He also pointed out the disparity in VAT rates across different states, highlighting that some states ruled by opposition parties have not implemented similar reductions, resulting in higher fuel prices in those regions.
The government remains dedicated to ensuring fair practices and ongoing dialogue to address issues in the deregulated fuel sector.
