New Delhi: Union Petroleum Minister Hardeep Singh Puri Tuesday ruled out any imminent hike in petrol or diesel prices but added a note of caution—if the West Asia conflict is prolonged and oil prices continue to spiral globally, Indian OMCs can see approximately Rs $28 million of their profit from last year wiped out this quarter.
“I mean, there have been times when the oil companies have done exceptionally well till recently. But, the rate at which we’re going, this one quarter of losses may wipe out the entire profit after tax of last year, which was about $28 million or something,” Puri said, addressing the CII Annual Business Summit.
The minister added, “We don’t know how long this will take (the ongoing West Asia conflict)… if you look at the fiscal situation, if you look at the fact that my oil companies are losing Rs 1,000 crore every day, that the under-recovery is going to be nearly Rs 2 lakh crore…how long can you keep it like this? Oil prices used to be at around $64 or $65 a barrel. It has gone up to $115….”
The under-recoveries on petrol, diesel and LPG, Puri said, has touched approximately Rs 1.98 lakh crore.
He added that it is in this context that he thinks PM Narendra Modi’s appeal, urging citizens to use fuel judiciously and make responsible lifestyle choices, is visionary. “The PM is saying that look, if this continues, you have to start thinking in terms of measures that will require to be taken to lessen the fiscal strain. That’s the point. I have been a trade negotiator, you use terms in the context of climate change negotiation, mitigation and adaptation but the time has come for us to also look at those things.”
At the same time, Puri reiterated that there is no cause for anxiety and India has more than enough stock of crude oil, LNG and LPG.
“Let me tell you categorically, we have no supply side problems…we have 60 days of LNG and we have 45 days of LPG. So there’s no problem on the supply side. So why this panic since yesterday or a day-and-a-half? Today, the country has more than enough stocks of crude oil. LNG and LPG. When this crisis began, there were some concerns, but we converted the challenge into an opportunity.”
The minister said that India has ramped up its domestic production of LPG, which used to be 36,000 metric tonnes per day to 54,000 metric tonnes per day. “During this crisis, our energy consumption has actually gone up. If I looked at some statistics that my colleagues gave me yesterday, petrol consumption has gone up by 6 percent. In this crisis, there have been no shortcuts anywhere, no dryouts.”
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Hardeep Puri on supply side, reserves & piped gas
Hardeep Singh Puri also said that India has managed the supply side very well till now. “The war broke out on 28 February…for 75 weeks, we didn’t have to hike petrol prices. If I remember correctly and I have my colleague sitting here, we haven’t raised prices for the last four years. We’re the only country in the world.”
He also said that there was some speculation that now since the five assembly elections are over, the government could hike fuel prices. “I want to ask how many elections have happened in the last four years and how many times petrol prices have been hiked? 2022 was the last time we raised prices. There was a general election in 2024. There have been elections in the states,” he said.
On India’s strategic reserves Puri said that the country has ‘something like 76 days of holding’, which is not bad but added that the time has come that “we will need to stock up even more”.
The Paris-headquartered International Energy Agency (IEA) mandates that a country must have 90 days of imports.
“…but the problem is, if you’re a country like India, which has a huge coastline, which is proximate geographically to West Asia, which is nearby, what kind of reserve or storage are you looking for? So we have been looking traditionally, and maybe that’s something we need to correct,” Puri said.
The Union minister also said that he expects industry leaders to tell all their constituents to switch from LPG to LNG on war footing.
“We’re doing a pretty good job in the sense that we are converting LPG, wherever there is a trunk pipeline. I’m telling my companies to lay the trunk line or to take the feeder line, but you know, you can play a great role. Just tell your people to give up their LPG and switch to piped gas,” he said, adding that there is no shortage of piped gas.
“It’s cleaner, it’s calorific value-wise better. It’s about 15-20 percent cheaper also, and it will help us make that transition. I’m not going to zero LPG. That’s not the idea, but I’m wanting to scale up the energy transition. Secondly, we are now very much in the zone of looking at even cleaner energy, green hydrogen, etc.,” he said.
(Edited by Amrtansh Arora)