Why petrol and diesel prices haven't fallen yet? Hardeep Singh Puri hints at rate cut after sustained low crude prices

Union Oil and Petroleum and Natural Gas Minister Hardeep Puri on Thursday said petrol and diesel prices could be reduced if international crude oil prices remain low for the next few weeks, according to a PTI report.

Responding to a question on a possible fuel price cut, Puri said it would become a legitimate issue if global oil prices continue to stay low over a sustained period.

His remarks came as crude oil prices fell below $71 per barrel after Qatar said Iran and the US had made "positive progress" in indirect talks that concluded on Wednesday, according to a Reuters report.


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Why fuel prices have not been cut yet

According to the report, state-run oil marketing companies are still processing crude oil purchased during the peak of the West Asia conflict, when prices were significantly higher.

Oil companies generally procure crude at least two months in advance before refining it into petrol and diesel. As a result, the fuel currently being produced is based on crude bought in April or early May, when oil prices were elevated.

The report added that crude prices started declining only in the second half of June after the US and Iran reached an agreement to end their war. Puri said any reduction in retail fuel prices would depend on international crude remaining low over the coming weeks.

Oil companies incurred losses

Puri said oil marketing companies incurred losses of Rs 74,781 crore by selling petrol, diesel and liquefied petroleum gas (LPG) below cost during the period up to June 30.

"Oil companies suffered Rs 74,781 crore loss for selling petrol, diesel and LPG below cost in the period up to June 30. International oil prices have come down but companies are still processing crude bought at the height of the West Asia crisis," he said.

Addressing a press conference on the West Asia crisis, the Union Minister of Petroleum and Natural Gas said oil marketing companies' total under-recovery, including petrol, diesel and LPG, from the previous year (Q4 FY26 and Q1 FY27) stood at Rs 2.1 lakh crore, according to ANI.

India plans to expand oil storage

Puri also said India should increase its crude oil and fuel storage capacity while international prices remain low and strengthen engagement with bilateral partners.

He said the country's crude stocks held at ports, terminals, refineries and strategic petroleum reserves are sufficient for 76 to 80 days, but added that India should have greater storage capacity.

Referring to the Gulf crisis, Puri said, "Maybe that's one of the lessons we've learned. We have learned the lesson and we will try to increase storage."