OMCs cut petrol, diesel prices by Rs 2, effective March 15

State-owned oil marketing companies will cut the prices of petrol and diesel across the country by Rs 2 from March 15, 6 am, as per social media posts by the Ministry of Petroleum and Natural Gas and Minister Hardeep Singh Puri on X today.

“Oil Marketing Companies (OMCs) have informed that they have revised petrol and diesel prices across the country. New prices would be effective from 15th March 2024, 06:00 AM,” the ministry said on X.

“By reducing the prices of petrol and diesel by Rs 2, the country's Prime Minister Narendra Modi has once again proved that the welfare and convenience of his family of crores of Indians is always his goal,” Puri said on X.

Following the revision, petrol will be priced at Rs 94.72 per litre in Delhi, while Diesel will be priced at Rs 87.62 per litre. In Mumbai, one litre of petrol and diesel will cost Rs 104.21 and Rs 92.15, respectively. 

The much-awaited reduction in petrol and diesel prices, which have remained unchanged since May 2022, will help reduce the hit on motorists’ wallets and also reduce operating costs for scores of vehicles across India.

The new prices of petrol and diesel in New Delhi, Mumbai, Kolkata and Chennai. Images: Ministry of Petroleum & Natural Gas

The announcement on price comes ahead of the Lok Sabha elections, which is scheduled for April-May. Recently, Indraprastha Gas Ltd and Mahanagar Gas reduced the prices of compressed natural gas by Rs 2.50 per kilogram.

India is the world’s third-largest consumer of crude oil, and imports more than 85% of its crude oil requirements. So, the prices of petrol and diesel are linked to international benchmarks. The retail prices of the fuels also depend on factors such as exchange rate, shipping charges, inland freight, refinery margin, dealer commission, central taxes, and state value-added tax.

State-owned oil marketing companies follow the dynamic fuel pricing model, by which they should revise the fuel prices daily based on a 15-day rolling average of international benchmark prices. However, Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp, which control around 90% of the fuel retail outlets, have not revised the prices since April 2022.

Though crude oil prices have dropped to the range of US$85 per barrel from over US$100 in 2022, their volatility continues amid unpredictable geopolitical situations in some regions and production regulations. For instance, in September crude was trading at over US$95 per barrel. Brokerage Nomura had then said oil marketing companies were estimated to have been incurring under-recoveries of Rs 7.4 per litre on the sales of petrol and diesel.

The last revision in petrol and diesel prices was in May 2022, when the central government slashed the excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre.

Price build-up of petrol and diesel in Delhi till March 14, 2024. From March 15, petrol will cost Rs 94.72 a litre and diesel Rs 87.62 a litre.