Prices of petrol and diesel have been made market-determined by the Government with effect from 26 June, 2010 and 19 October, 2014 respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with international product prices and other market conditions.
The prices of petroleum products are linked to the price of respective products in the international market. Oil Marketing Companies take a decision on retail selling price after considering various aspects including international product prices, exchange rate, tax structure, inland freight and other cost elements.
Fluctuation in crude oil prices is a regular phenomenon and the price of crude oil is determined by many factors, including geo-political situation and demand and supply in the global market.
With an aim to reduce the prices of petrol and diesel and give relief to the consumers, the Central Government reduced the Central Excise duty on petrol and diesel by Rs. 2 per litre with effect from 4 October, 2017. The Central Government further reduced the Central Excise duty on petrol and diesel by Rs. 1.50 per litre with effect from 5 October, 2018 and Public Sector OMCs also reduced Rs. 1.00 per litre to reduce the overall price of petrol and diesel.
The Government continues to modulate the effective price to consumer for Subsidized Domestic LPG and retail selling price of PDS Kerosene. The weightage of petrol, diesel, LPG and kerosene in the WPI index is 1.60%, 3.10%, 0.64% and 0.19% respectively.