Govt Cuts Fuel Prices Despite Global Oil Volatility

22 Aug 2025 CW Team

The Minister noted that petrol and diesel prices are market-driven and linked to the international crude market, with India importing over 85 per cent of its crude requirements. Crude oil prices (Indian basket) rose from USD 55 per barrel in March 2015 to USD 113 per barrel in March 2022, peaking at USD 116 per barrel in June 2022, before continuing to fluctuate due to geopolitical and market factors.

Domestically, retail prices in Delhi have fallen to Rs 94.77 per litre for petrol and Rs 87.67 per litre for diesel, compared with Rs 110.04 and Rs 98.42 per litre respectively in November 2021. The Central Government cut excise duty by Rs 13 per litre on petrol and Rs 16 per litre on diesel in two phases (November 2021 and May 2022), with the full benefit passed on to consumers. Several states also reduced VAT, while in March 2024 OMCs further lowered retail prices by Rs 2 per litre each. In April 2025, excise duty was raised again by Rs 2 per litre, though this increase was not passed on to customers.

Other measures include intra-state freight rationalisation, which has reduced fuel prices in remote areas and narrowed price differences within states. The Government has also diversified its crude import basket, ensured fuel availability under the Universal Service Obligation, and strengthened domestic exploration and production.

To reduce reliance on fossil fuels, the Government is promoting ethanol blending, CNG, LNG, hydrogen, and electric vehicles. The National Policy on Biofuels 2018 initially set a target of 20 per cent ethanol blending in petrol by 2030, later advanced to 2025–26. In the current Ethanol Supply Year (2024–25), public sector OMCs have already achieved an average blending of 19.05 per cent (as of 31 July 2025), with 19.93 per cent blending recorded in July 2025.

The Government has launched multiple programmes to promote biofuels, including the Ethanol Blended Petrol (EBP) Programme, biodiesel blending initiatives, and the SATAT scheme for Compressed Bio Gas (CBG). Incentives for ethanol production, second-generation ethanol refineries under the Pradhan Mantri JI-VAN Yojana, and interest subvention for expanding distillation capacity are among the steps being implemented.

Minister Puri emphasised that investing in alternative energy will secure India’s long-term energy needs, reduce dependence on imports, and create sustainable growth opportunities across rural and urban India.

Union Minister of Petroleum and Natural Gas, Hardeep Singh Puri, has reaffirmed the Government’s commitment to energy security, affordability, and accessibility for all citizens. In a written reply to the Lok Sabha, he said that despite fluctuations in international crude oil prices, domestic petrol and diesel prices have been reduced through coordinated measures by the Government and Public Sector Oil Marketing Companies (OMCs).The Minister noted that petrol and diesel prices are market-driven and linked to the international crude market, with India importing over 85 per cent of its crude requirements. Crude oil prices (Indian basket) rose from USD 55 per barrel in March 2015 to USD 113 per barrel in March 2022, peaking at USD 116 per barrel in June 2022, before continuing to fluctuate due to geopolitical and market factors.Domestically, retail prices in Delhi have fallen to Rs 94.77 per litre for petrol and Rs 87.67 per litre for diesel, compared with Rs 110.04 and Rs 98.42 per litre respectively in November 2021. The Central Government cut excise duty by Rs 13 per litre on petrol and Rs 16 per litre on diesel in two phases (November 2021 and May 2022), with the full benefit passed on to consumers. Several states also reduced VAT, while in March 2024 OMCs further lowered retail prices by Rs 2 per litre each. In April 2025, excise duty was raised again by Rs 2 per litre, though this increase was not passed on to customers.Other measures include intra-state freight rationalisation, which has reduced fuel prices in remote areas and narrowed price differences within states. The Government has also diversified its crude import basket, ensured fuel availability under the Universal Service Obligation, and strengthened domestic exploration and production.To reduce reliance on fossil fuels, the Government is promoting ethanol blending, CNG, LNG, hydrogen, and electric vehicles. The National Policy on Biofuels 2018 initially set a target of 20 per cent ethanol blending in petrol by 2030, later advanced to 2025–26. In the current Ethanol Supply Year (2024–25), public sector OMCs have already achieved an average blending of 19.05 per cent (as of 31 July 2025), with 19.93 per cent blending recorded in July 2025.The Government has launched multiple programmes to promote biofuels, including the Ethanol Blended Petrol (EBP) Programme, biodiesel blending initiatives, and the SATAT scheme for Compressed Bio Gas (CBG). Incentives for ethanol production, second-generation ethanol refineries under the Pradhan Mantri JI-VAN Yojana, and interest subvention for expanding distillation capacity are among the steps being implemented.Minister Puri emphasised that investing in alternative energy will secure India’s long-term energy needs, reduce dependence on imports, and create sustainable growth opportunities across rural and urban India.

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