Last Updated:

India's Petrol & Diesel Rates High Due To Global Crude Rates & Demand Destruction: Pradhan

International markets have reduced fuel production and manufacturing countries are producing less fuel to gain more profit— also a reason the minister specified

petrol price

Union Minister for Petroleum and Natural Gas and Steel Dharmendra Pradhan on Tuesday said that the hike in the price of crude oil in global markets is the reason that the rates of petrol and diesel have risen to unprecedented highs. He referred to queries raised by the opposition on tax that is levied on fuel and said that revenue and growth of a nation are dependent on tax collection, as it is used for the welfare of the masses.

Pradhan pointed that "International markets have reduced fuel production and manufacturing countries are producing less fuel to gain more profit. This is also one of the reasons that consumer countries are suffering. We have been appealing to the Organisation for the Petroleum manufacturing Countries (OPEC) to help stop this process. We hope there will be a change."

"The demand destruction that has happened due to coronavirus has majorly impacted the leading oil supplying nations. The oil supplying countries had promised that the supply cycle will normalise by January this year. However, they are still unstable and that has led to such a situation where fuel prices have hit a record high in India and other countries," Pradhan added.

READ | Petrol And Diesel Prices In India Per State: How Much Fuel Costs In States On Feb 23

He then stressed that since the NDA government since day one of its governance has been appealing that the petroleum sector must be taken under GST. "If petrol is taken under GST, the sector will grow and the consumers will be ultimately benefitted. This is a topic that the GST council is mulling on that all the states are a part of," Pradhan detailed.

 READ | Amid High Petrol & Diesel Prices, Robert Vadra Rides Cycle & Rahul Gandhi Alleges 'loot'

Speaking on projects for oil exploration in North-Eastern states, he said that while the Assam, Nagaland, Arunachal Pradesh, Tripura, and Mizoram have ample oil, it is not sufficient. "After PM Modi took charge in 2014, we planned to have the North Eastern Hydro Carbon Vision-2030 that is aimed at exploring ways to establish infrastructure for extraction of oil and generation of gas," Pradhan said. He added that oil exploration will be ramped up in the Northeast and infrastructure for this purpose will include pipelines, gas pipelines, and LPG pipelines. "If these projects pick pace in Northeast, the refining capacity will also get a boost, in turn, enhancing the oil and gas production."

READ | Petrol & Diesel Prices In India Per State: How Much Fuel Costs In States, Cities On Feb 22

He further referred to LPG and said that under the 2030 vision for Northeast, "we have already allotted projects worth Rs 50,000-55,000 crore. PM Modi on Monday dedicated Rs 3,000 crore for three oil and gas projects in Assam, that will help generate employment for locals and has benefitted the government in terms of revenue."

READ | Nagaland Govt Reduces Taxes On Petrol & Diesel; Petroleum Minister Explains Price Hike

First Published: