Fuel prices in India won't fall immediately despite global crude slump, MoS Suresh Gopi reveals why

Global crude oil prices may be easing, but Indian consumers are unlikely to see an immediate reduction in petrol and diesel prices, with Union Minister of State for Petroleum and Natural Gas Suresh Gopi on Thursday saying a drop in international oil prices takes time to translate into relief at the pump.

The minister said fuel prices cannot be reduced immediately when global crude becomes cheaper because several factors influence retail rates, including the time taken for lower-priced crude shipments to reach India.

Also read: Petrol, Diesel prices remain unchanged despite 4% drop in crude oil after Iran-US peace deal

The shipping lag behind cheaper oil

"It will take time as the cheaper crude has to be transported to India via Strait of Hormuz, which will see an excessive traffic of ship movement. So things will have to be normalised," Gopi told reporters.

Referring to the recent increase in fuel prices, he said only around Rs 3.94 per litre had impacted consumers and stressed that the hike could not be instantly rolled back simply because crude prices had fallen globally.

Gopi said oil companies had been hit hard since the war in West Asia broke out in February this year and that the Centre had absorbed a substantial part of the impact to shield consumers.

Also read: Fuel prices to be reviewed based on crude oil supply, says Union Minister Suresh Gopi

Centre absorbed Rs 12,000 crore hit, says minister

"By absorbing the impact, the Centre lost Rs 12,000 crore. None of the states reduced their revenue by charging a lesser excise duty on the higher fuel prices. The central government has to run and the oil companies have to survive," he said.

On a separate issue, Gopi said the establishment of an AIIMS in Kerala would have to follow due procedure and could not be carried out "akin to shopping in a market".

He also pointed to a slight "discrepancy" in Kerala Health Minister K Muraleedharan's reported remarks that an AIIMS could be set up anywhere in the state.

"The state has to inform the committee dealing with the matter about the number of sites it has identified for setting up an AIIMS and thereafter, discussions would be held on selecting a location," he said.

Gopi added that while Muraleedharan had said he would get in touch with him, he had not received any official invitation for talks on the matter.

(With inputs from PTI)