‘Petroleum products affordable in India despite global disruptions, will be 2nd largest refining hub’: Min Hardeep Puri

Minister of Petroleum and Natural Gas of India Hardeep Singh Puri said that the country has maintained the “affordability” of petroleum products despite disruptions in the global energy markets.

Addressing the media, the minister on Friday said the increase in petrol and diesel prices over the last two years has been minimal compared to several other major economies and neighbouring nations.

Responding to the opposition’s criticism over oil prices, Puri slammed them by pointing out that states governed by the BJP have reduced the VAT on petroleum products significantly, leading to lower rates for consumers compared to states ruled by other parties.

Highlighting the Modi government’s success in areas of trade and foreign policy, Puri said that India is in the process of expanding its oil refining capabilities.

The country is already the world’s fourth largest refining hub and we are going to end up as the second largest refining place, he added.

“PM Modi’s governance is transforming our foreign policy, trade policy, energy policy,” he said. Asked whether the government plans to slash the petroleum prices as it is procuring crude from Russia at a discounted rate for over one year, Puri did not give a direct reply and said the discount is not that much now.

At the same time, he highlighted how the government managed to keep the oil prices under an affordable range besides enhancing the country’s refining capability. Even during the most volatile period in the energy markets, Prime Minister Modi ensured “availability, affordability and sustainability” of fuel by reducing central excise twice, he said.

Puri said the increase in petrol prices in India between June 2021 and June 2023 was 2.36 per cent, while the hike in Pakistan, Bangladesh, Sri Lanka and Nepal during the period was 50.83 per cent, 30.11 per cent, 79.61 per cent and 42.39 per cent respectively.

Citing data from large economies, Puri said the rise in petrol prices during the period in the US was 30.15 per cent while the hike in France, Germany, Italy, Spain, the UK and Canada was 22.67 per cent, 19.08 per cent, 14.68 per cent, 17 per cent, 10.93 per cent and 24.17 per cent respectively.

In the case of diesel, he said the increase in India was 4.97 per cent while the increase in Pakistan was 40.81 per cent, Bangladesh 50.11 per cent, Sri Lanka 130.65 per cent and it was 130.65 per cent in Nepal.

Puri said the hike in diesel prices in the US in that period was 29.31 per cent, while it was 19.47 per cent in France, 17.50 per cent in Germany, 14.57 per cent in Italy, 16.38 per cent in Spain and 21.20 per cent in Canada.

“India has been able to insulate itself from the rising fuel prices by taking several steps, including a reduction in the excise duty by the Centre,” he said. Questioning the opposition’s criticism of the government on oil prices, he said while the rate of per litre petrol in Guwahati in July was Rs 98.03 (BJP-ruled state), the cost in Kolkata was Rs 106.03 (TMC-ruled).

Similarly, Puri said the price of petrol per litre in Lucknow in July was Rs 96.57 while it was Rs 101.94 in Bengaluru. On whether the government plans to pass on the benefits of procuring crude oil at discounted rates from Russia, Puri said there were good discounts initially but suggested that the rates have gone up now. “There were good discounts initially and then they started raising prices…Now the discount is not that much,” he said.

Puri said India is significantly expanding its refining capabilities. He said the country now has a refining capacity of around 300 million metric tons per annum and the government was looking at increasing it to over 400 million metric tonnes and that the government was looking at a major transition in the sector.

India has strategically diversified its import basket from only 27 countries to 39 countries, he said, adding the country has increased ethanol blending in petrol from 1.53 per cent in 2014 to 11.7 per cent in June 2023.

On India’s overall growth trajectory, Puri said India is the fastest-growing major economy in the world and that according to the IMF, the country will contribute 15 per cent of the global growth in 2023.

It is estimated that India’s GDP will cross 3.75 trillion USD in 2023, he said and cited the World Bank data to note that the figure was 2.04 trillion USD in 2014. Highlighting the outcome of the Modi government’s policies, Puri citing a report by NITI Aayog, said 135 million people exited “multi-dimensional poverty” between 2015-16 and 2019-21.

With inputs from agencies.