The Centre on Thursday said the Government of India is monitoring the global crude oil situation and energy markets very closely and is ready to take appropriate action as and when needed. In a written reply to a question in Loka Sabha, Union Minister of State for Petroleum and Natural Gas Rameswar Teli said the prices of petrol and diesel have been market-determined since 2010 and that the public sector Oil Marketing Companies (OMCs) determine the price in line with several factors, such as international product prices, exchange rate, tax structure, inland freight and other cost elements.

Domestic LPG, the government continues to modulate the effective prices to consumer, Teli said.

The geopolitical situation between Russia and Ukraine has resulted in a steep increase in global crude oil and gas prices. "Government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall-out of the evolving geopolitical situation. In November 2021, in a bid to control inflationary pressures, Government of India, in consultation and parallelly with major energy consumers, had agreed to release 5 million barrels from its Strategic Petroleum Reserves," Teli's reply read.

He further said the Centre is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices.

"Further, to ensure security of crude supplies and to mitigate the risk of dependence on crude oil from single region, Oil Public Sector Undertakings (PSUs) have diversified their petroleum basket and are procuring crude from countries located at various geographical locations viz. Middle East, Africa, North America, South America etc," the reply said.

The Centre has reduced the Central Excise duty on petrol and diesel by Rs 5 and Rs 10 per litre respectively, effective from 4 November, 2021. The measure was aimed to give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes. Following this reduction in Central Excise duty, many States/UTs have also reduced the VAT on petrol and diesel subsequently, the minister said.

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