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HomeEconomyPradhan attributes petrol-diesel price rise to Covid, crude shock

Pradhan attributes petrol-diesel price rise to Covid, crude shock

There was a total collapse in demand for petroleum across the world due to Covid lockdown, and petroleum producers had to reduce production, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan explained

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Much as the prices of petrol and diesel have long been deregulated, the Narendra Modi government’s practice of telling the oil companies whether it was time to pass on the benefit of falling crude price to consumers or hold the savings as extra state income to be invested in development necessitates an explanation when consumers question the rates. Justifying the rising petroleum prices, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan has said that the rise in in the international market and the impact of Covid-19, which has increased the government’s welfare and developmental commitment, has led to the present situation.

“Some component of petroleum price is coming from the tax regime. We are passing through an unusual phase due to Covid pandemic. The spending of the Union and state governments has gone up. There is a 34% increase in capital expenditure in the budget. But we have to carry forward our and we need resources,” he told reporters.

The union minister had arrived in Kochi to attend the inauguration of the Petrochemical Park at BPCL Kochi Refinery, which will be opened by Prime Minister Narendra Modi on Sunday. The minister blamed the oil-producing countries for the steep rise in petroleum prices, alleging that they were creating an artificial pricing mechanism, which was ‘pinching’ the consumer countries.

“There was a total collapse in demand for petroleum across the world due to Covid lockdown, and petroleum producers had to reduce production. Now the has revived and India has returned almost to the pre-Covid position. However, the oil producers have not increased production,” said Pradhan.

The union minister said India had conveyed to the oil producers that they could not push consumer countries this way. “The OPEC has announced a future pricing mechanism in which they have given some relief to Asian countries. They have hiked the prices for Europe and America but have spared Asian countries, but I am not satisfied with this arrangement,” said Pradhan.

Refuting charges that the government is hiking the price of petrol whenever it gets a chance, he said the price had remained stable for 240 days last year. Justifying the decision to implement a Rs 6,000 crore at BPCL Kochi Refinery ahead of disinvestment, the minister said the project would facilitate the production of niche petrochemicals which are predominantly being imported in the country.

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