Closely monitoring global energy market, potential supply disruptions: Govt

Minister of state in Petroleum and Natural Gas while replying to Rajya Sabha informed that geopolitical situation between Russia-Ukraine has resulted in a steep rise in global crude oil and gas prices

The Minister of State for Petroleum and Natural Gas, Rameswar Teli in a written reply to a question in the Rajya Sabha on Monday informed that the geopolitical situation between Russia and Ukraine has resulted in a steep increase in global crude oil and gas prices.

He said that the government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall-out of the evolving geopolitical situation.

According to the Ministry of Petroleum and Natural Gas, in November 2021, in a bid to control inflationary pressures, the Government of India, in consultation and parallelly with major energy consumers, had agreed to release 5 million barrels from its Strategic Petroleum Reserves.

The government of India is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices, said the ministry.

"Prices of petrol and diesel have been market-determined with effect from June 26, 2010, and October 19, 2014, respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on the pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements. The prices of petroleum products in the country are linked to the price of respective products in the international market," said the ministry.

As per the ministry, the Central Government reduced the Central Excise duty on petrol and diesel by Rs. 5 and Rs. 10 per litre respectively effective from 4 November 2021. The measure was aimed to give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes. Many States/UTs have also reduced the VAT on petrol and diesel subsequently.

"Prices of LPG in the country are based on Saudi Contract Price (CP), the benchmark for international prices of LPG. Saudi CP has risen approximately 228 per cent from April 2020 to February 2022 (236 USD/MT to 775 USD/MT). However, for domestic LPG the Government continues to modulate the effective price to consumers to insulate the common man from rise in international prices," added the ministry.