Fuel prices likely to decrease as Centre agrees to release 5 million barrels of crude oil from its SPR

Fuel prices in India are likely to decrease as the Centre, on Monday, agreed to release 5 million barrels of crude oil from its strategic petroleum reserves (SPR). 

This was informed by the petroleum ministry in the Rajya Sabha on Monday. 

This decision of the Indian government comes in consultation and parallelly with other major global energy consumers including the United States, China, Japan and South Korea. 

“Domestic price of crude linked to international benchmarks of crude prices. These get affected by many factors including supply and demand, futures’ trading, impact of covid scenario and geopolitical situation. Linear co-relation between pricing and any one of these factors in isolation indeterminable,” the petroleum ministry said. 

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“Government is consistently reviewing high petroleum prices domestically. Government of India had reduced ‘central excise duty’ on petrol and diesel by Rs 5 per litre and Rs 10 per litre respectively on November 3,” the ministry said. 

It added: “It was followed by reduction in VAT on fuel by many state governments.” 

Earlier in November, the United States released 50 million barrels of crude from its strategic reserves in consultation with China, Japan, India, South Korea and the United Kingdom.