Executive Summary:
This document addresses Lok Sabha Starred Question No. 412 regarding the impact of petrol and diesel prices, including price increases over the last five years, economic impact assessments, potential tax reductions, and strategies for alternative energy promotion. It provides state-wise retail selling prices (RSP) of petrol and diesel as of January 1st for the past several years and details government initiatives. The answer was provided on August 21, 2025.
Key Points / Main Content:
* **Pricing and Market Dynamics:**
* Petrol and diesel prices are market-determined by Public Sector Oil Marketing Companies (OMCs) and linked to international market prices.
* India imports over 85% of its crude oil.
* Crude oil prices have fluctuated, increasing from $55/bbl in March 2015 to $116/bbl in June 2022.
* Domestic petrol and diesel prices in Delhi decreased from ₹110.04 and ₹98.42 per litre in November 2021 to ₹94.77 and ₹87.67 per litre, respectively.
* **Government Interventions:**
* Central Excise duty was reduced by ₹13/litre on petrol and ₹16/litre on diesel in November 2021 and May 2022, passed on to consumers.
* Some State Governments reduced VAT rates.
* In March 2024, OMCs reduced retail prices by ₹2/litre each.
* In April 2025, excise duty increased by ₹2/litre but was not passed on to consumers.
* Intrastate freight rationalisation by PSU OMCs benefited consumers in remote areas by reducing price differences.
* Diversification of crude import basket and Universal Service Obligation provisions were invoked.
* **Economic Impact Assessment:**
* Impact assessed through the Wholesale Price Index (WPI).
* Petrol and Diesel have weightages of 1.60 and 3.10 in the WPI index, respectively.
* State-wise Retail Selling Prices (RSP) of Petrol and Diesel on January 1st annually since 2021 are detailed in Annexure I and II.
* **Alternative Energy Promotion:**
* Government promotes CNG, LNG, Hydrogen, biofuels (including ethanol), and electric vehicles.
* National Policy on Biofuels 2018 targets 20% ethanol blending in petrol and 5% biodiesel blending in diesel by 2030, with the ethanol target advanced to 2025-26.
* Ethanol blending achieved 19.05% average during Ethanol Supply Year (ESY) 2024-25 as of 31.07.2025, with 19.93% in July 2025.
* Initiatives include Ethanol Blended Petrol (EBP) Programme, Biodiesel blending programme, and Sustainable Alternative towards Affordable Transportation (SATAT).
* Steps taken for biofuel production include pricing incentives, alternate ethanol production routes, Pradhan Mantri JI-VAN Yojana, SATAT initiative, and interest subvention scheme.
Impact Analysis:
* **Consumers (Poor and Middle Class):**
* *Impact:* Affected by fluctuations in petrol and diesel prices, influencing household expenses and transportation costs. Benefit from reduced prices due to government interventions and freight rationalisation.
* *Action Required:* Monitor price changes and avail benefits from government initiatives.
* **Public Sector Oil Marketing Companies (OMCs):**
* *Impact:* Responsible for implementing market-determined pricing and government policies.
* *Action Required:* Adjust pricing based on international markets, implement government directives on tax reductions and alternative fuel promotion, and continue intrastate freight rationalisation.
* **State Governments:**
* *Impact:* Impacted by decisions regarding VAT rates on petrol and diesel.
* *Action Required:* Consider reducing VAT rates to provide relief to citizens, monitor price changes and coordinate with central government on policy implementation.
* **Ethanol and Biofuel Producers:**
* *Impact:* Benefit from government programs promoting biofuel production and blending.
* *Action Required:* Participate in Ethanol Blended Petrol (EBP) Programme and Sustainable Alternative towards Affordable Transportation (SATAT) initiative, and utilise government incentives and schemes.
Key Entities Referenced
Lok Sabha: The lower house of the Parliament of India, where the starred question was raised.
Minister of PETROLEUM AND NATURAL GAS: The government ministry responsible for petroleum and natural gas.
Hardeep Singh Puri: The Minister of Petroleum and Natural Gas.
Public Sector Oil Marketing Companies OMCs: Indian public sector companies that handle the marketing and distribution of oil and petroleum products.
Central Excise duty: A tax levied by the Central Government on the production or manufacture of goods within the country. Mentioned in the context of reductions on petrol and diesel.
National Policy on Biofuels 2018: A government policy document that outlines the framework for promoting the production and use of biofuels in India.
Ethanol Blended Petrol EBP Programme: A program where Oil Marketing Companies sell petrol blended with ethanol.
Delhi: A city and union territory of India, used as a reference for petrol and diesel prices.
LOK SABHA
STARRED QUESTION NO. 412
TO BE ANSWERED ON 21 AUGUST, 2025
Impact of Prices of Petrol and Diesel
†*412. SMT. GENIBEN NAGAJI THAKOR:
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ी
Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:
(a) the increase in the prices of petrol and diesel during each of the last five years and the current
year, State-wise;
(b) whether the Government has carried out any study or assessment of the economic impact of
this increase on the consumers particularly the poor and middle class consumers and if so, the
details thereof;
(c) whether the Government proposes to reduce the taxes levied by the Union and the State
Governments to check the retail prices of petrol and diesel and if so, the details thereof; and
(d) whether the Government proposes to implement any new strategy or scheme to promote
alternative energy sources like electric vehicles, ethanol, biofuel etc. and if so, the details
thereof?
ANSWER
पेट(cid:332)ोिलयम और (cid:366)ाकृ ितक गैस मं(cid:361)ी
( (cid:373)ी हरदीप िसंह पुरी )
MINISTER OF PETROLEUM AND NATURAL GAS
(SHRI HARDEEP SINGH PURI)
(a) to (d): A statement is laid on the Table of the House.Statement referred to in reply to parts (a) to (d) of Lok Sabha Starred Question No. 412
asked by Smt. Geniben Nagaji Thakor to be answered on 21 August 2025 regarding
“Impact of Prices of Petrol and Diesel”.
(a) to (c): Prices of petrol and diesel are market determined and Public Sector Oil Marketing
Companies (OMCs) take appropriate decision on pricing of petrol and diesel.
The prices of petroleum products in the country are linked to the price of respective products in
the international market. India imports more than 85% of its crude oil requirements. Crude oil
prices (Indian basket) increased from $55/bbl (March 2015) to $113/bbl (March 2022) and
further to $116/bbl (June 2022) and have continued to fluctuate due to various geopolitical and
market factors, whereas domestically, Petrol and Diesel prices have come down to Rs. 94.77 and
Rs. 87.67 per litre respectively (Delhi prices) from Rs. 110.04 and Rs. 98.42 per litre in
November 2021 as a result of various steps taken by Government and PSU OMCs.
Central Excise duty was reduced by the Central Government by a total of Rs. 13/litre and Rs.
16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022,
which was fully passed on to consumers. Some State Governments also reduced state VAT rates
to provide relief to citizens. In March, 2024, OMCs reduced the retail prices of petrol and diesel
by Rs. 2 per litre each. In April 2025, excise duty on Petrol and Diesel was increased by Rs. 2
per litre each but this was not passed on to consumers.
PSU OMCs have also carried out an intra-state freight rationalisation. This has benefitted
consumers located at remote areas, far from Petroleum Oil & Lubricants (POL) Depots in the
form of reduced Petrol and Diesel prices in remote parts within the states. This initiative has also
reduced the difference between the maximum and minimum retail prices of Petrol or Diesel
within a state.
Government also took several other steps to insulate common citizens from high international
prices, which included diversifying the crude import basket, invoking the provisions of Universal
Service Obligation to ensure availability of petrol & diesel in domestic market etc.
The Government has taken several steps to control the impact of rising crude prices including
augmenting domestic exploration and production of crude oil, ethanol blending program,
improving the share of renewable sources in Indian energy basket etc.
The impact of increase/decrease in prices of petrol, diesel and LPG can be assessed through their
impact on inflation measured by Wholesale Price Index (WPI). The weightage of Petrol and
Diesel in the WPI index is 1.60% and 3.10% respectively.The details of State-wise Retail Selling Prices (RSP) of Petrol and Diesel on 1st January of every
year since 2021 are given at Annexure-I and II respectively.
(d): Government is committed towards security, affordability and accessibility of energy for
every citizen. To achieve these objectives Government is promoting usage of alternate fuels like
CNG, LNG, Hydrogen, biofuels including ethanol, electric vehicles, etc.
Government notified the National Policy on Biofuels - 2018 which laid out indicative target of
20% blending of ethanol in petrol and 5% blending of biodiesel in diesel by 2030 in the country.
Subsequently, Government advanced the target of 20% blending of ethanol in petrol from 2030
to 2025-26. During the ongoing Ethanol Supply Year (ESY) 2024-25, Public Sector OMCs have
achieved the average blending percentage of 19.05% as on 31.07.2025. During the month of
July, 2025, Ethanol blending of 19.93% has been achieved.
To promote the use of biofuels, various programmes such as Ethanol Blended Petrol (EBP)
Programme, wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol,
Biodiesel blending programme wherein biodiesel is blended with diesel, Sustainable Alternative
towards Affordable Transportation (SATAT) initiative wherein Compressed Bio Gas (CBG) is
marketed along with Compressed Natural Gas (CNG) have been taken up.
For Biofuel production across the country including rural India, the Government has taken steps
on pricing, incentives, opened alternate route for ethanol production, notified Pradhan Mantri JI-
VAN Yojana for setting up second generation ethanol bio-refineries based on agri residues for
ethanol production, SATAT initiative for production of CBG and bio-manure from various
waste / biomass sources, notified interest subvention scheme for enhancement and expansion of
ethanol distillation capacity etc.
*****Annexure-I
Annexure referred to in reply to Lok Sabha starred question no. 412 asked by Smt. Geniben Nagaji Thakor
to be answered on 21.08.2025 regarding “Impact of Prices of Petrol and Diesel”.
State-wise RSP of Petrol as on 1st January of every year
State Reference City 01.01.2021 01.01.2022 01.01.2023 01.01.2024 01.01.2025 01.08.2025
Delhi New Delhi 83.71 95.41 96.72 96.72 94.77 94.77
West Bengal Kolkata 85.19 104.67 106.03 106.03 105.01 105.41
Maharashtra Mumbai 90.34 109.98 106.31 106.31 103.50 103.50
Tamil Nadu Chennai 86.51 101.40 102.63 102.63 100.80 100.80
Tripura Agartala 84.13 98.23 99.49 99.49 97.53 97.53
Mizoram Aizawl 81.30 94.50 95.64 95.64 99.06 99.29
Haryana Ambala 81.35 95.30 97.48 97.48 95.54 95.94
Karnataka Bengaluru 86.51 100.58 101.94 101.94 102.92 102.92
Madhya Pradesh Bhopal 91.50 107.23 108.65 108.65 106.52 106.52
Odisha Bhubaneswar 84.34 101.81 103.19 103.19 101.11 101.11
Chandigarh Chandigarh 80.59 94.23 96.20 96.20 94.30 94.30
Uttarakhand Dehradun 84.20 94.00 95.13 95.13 93.36 93.55
Gujarat Gandhinagar 81.29 95.35 96.63 96.63 94.70 94.70
Sikkim Gangtok 85.00 98.50 102.70 102.70 101.75 101.55
Assam Guwahati 87.00 94.58 97.02 98.03 98.19 98.19
Telangana Hyderabad 87.06 108.20 109.66 109.66 107.46 107.46
Manipur Imphal 87.21 99.82 101.25 101.25 99.21 99.18
Arunachal Pradesh Itanagar 77.80 92.02 93.23 92.73 90.87 90.92
Rajasthan Jaipur 91.09 107.06 108.48 108.48 104.72 104.72
Nagaland Kohima 87.04 98.05 99.46 99.46 97.71 96.49
Uttar Pradesh Lucknow 83.59 95.28 96.57 96.57 94.69 97.55
Goa Panaji 80.62 96.38 97.68 97.22 96.43 97.75
Bihar Patna 86.25 105.90 107.24 107.24 105.23 94.69
Puducherry Puducherry 85.43 94.94 96.16 96.16 96.26 96.43
Andaman & Nicobar
Sri Vijaya Puram 70.48 82.96 84.10 84.10 82.46 105.23
Islands
Chhattisgarh Raipur 82.46 101.11 102.45 102.45 100.45 96.26
Jharkhand Ranchi 82.80 98.52 99.84 99.84 97.86 82.46
Meghalaya Shillong 87.56 93.91 96.39 97.92 96.25 99.44
Himachal Pradesh Shimla 81.81 95.78 96.96 96.96 94.78 97.86
Jammu & Kashmir Srinagar 87.43 100.36 101.74 101.74 99.70 96.32
Kerala Thiruvananthapuram 85.72 106.36 107.71 109.73 107.48 95.34
Jammu & Kashmir Jammu 83.88 96.15 97.50 97.50 95.48 100.32
Punjab Jalandhar 84.82 94.94 96.18 98.01 96.87 107.48
Dadra & Nagar
Haveli & Daman & Daman 79.93 93.10 94.31 94.31 92.44 92.56
Diu
Ladakh Leh 89.87 102.99 104.27 104.27 102.36 92.44
Andhra Pradesh Amaravati 89.92 110.47 111.87 111.87 109.74 101.69
Maharashtra Pune 90.04 109.52 105.84 105.84 103.82 109.74
Andhra Pradesh Vishakhapatnam 88.62 109.05 110.48 110.48 108.35 100.75
Source: IOCLAnnexure-II
Annexure referred to in reply to Lok Sabha starred question no. 412 asked by Smt. Geniben Nagaji Thakor
to be answered on 21.08.2025 regarding “Impact of Prices of Petrol and Diesel”.
State-wise RSP of Diesel as on 1st January of every year
State Reference City 01.01.2021 01.01.2022 01.01.2023 01.01.2024 01.01.2025 01.08.2025
Delhi New Delhi 73.87 86.67 89.62 89.62 87.67 87.67
West Bengal Kolkata 77.44 89.79 92.76 92.76 91.82 92.02
Maharashtra Mumbai 80.51 94.14 94.27 94.27 90.03 90.03
Tamil Nadu Chennai 79.21 91.43 94.24 94.24 92.39 92.39
Tripura Agartala 77.25 85.61 88.44 88.44 86.55 86.55
Mizoram Aizawl 73.32 79.55 82.12 82.12 87.92 88.07
Haryana Ambala 73.94 86.53 90.31 90.31 88.37 88.37
Karnataka Bengaluru 78.31 85.01 87.89 87.89 88.99 90.99
Madhya Pradesh Bhopal 81.68 90.87 93.90 93.90 91.89 91.89
Odisha Bhubaneswar 80.46 91.62 94.76 94.76 92.69 92.69
Chandigarh Chandigarh 73.61 80.90 84.26 84.26 82.45 82.45
Uttarakhand Dehradun 74.51 87.32 90.20 90.20 88.24 88.37
Gujarat Gandhinagar 79.72 89.33 92.38 92.38 90.38 90.38
Sikkim Gangtok 76.40 83.55 89.80 89.80 89.00 88.85
Assam Guwahati 80.42 81.29 87.95 90.33 89.42 89.42
Telangana Hyderabad 80.60 94.62 97.82 97.82 95.70 95.70
Manipur Imphal 77.09 84.26 87.17 87.17 85.26 85.25
Arunachal Pradesh Itanagar 71.44 79.63 82.32 82.17 80.38 80.41
Rajasthan Jaipur 83.06 90.70 93.72 93.72 90.21 90.21
Nagaland Kohima 77.79 84.59 87.56 87.56 88.83 83.33
Uttar Pradesh Lucknow 74.21 86.80 89.76 89.76 87.81 87.38
Goa Panaji 77.35 87.27 90.23 89.79 88.20 88.86
Bihar Patna 79.04 91.09 94.04 94.04 92.09 87.81
Puducherry Puducherry 78.40 83.58 86.33 86.33 86.47 88.20
Andaman & Nicobar
Sri Vijaya Puram 69.22 77.13 79.74 79.74 78.05 91.49
Islands
Chhattisgarh Raipur 80.10 92.33 95.44 95.44 93.39 86.47
Jharkhand Ranchi 78.17 91.56 94.65 94.65 92.62 78.05
Meghalaya Shillong 80.01 80.58 84.65 86.68 87.47 93.39
Himachal Pradesh Shimla 73.68 80.35 82.94 88.94 87.13 92.62
Jammu & Kashmir Srinagar 77.63 83.91 86.83 86.83 84.88 87.52
Kerala Thiruvananthapuram 79.65 93.47 96.52 98.53 96.48 87.32
Jammu & Kashmir Jammu 74.59 80.32 83.26 83.26 81.32 86.65
Punjab Jalandhar 75.54 83.75 86.55 88.34 87.38 96.48
Dadra & Nagar Haveli &
Daman 78.42 86.97 89.86 89.86 87.94 88.05
Daman & Diu
Ladakh Leh 80.59 86.67 89.25 89.37 87.46 87.94
Andhra Pradesh Amaravati 82.98 96.55 99.61 99.61 97.57 87.06
Maharashtra Pune 79.01 92.31 92.36 92.36 90.35 97.57
Andhra Pradesh Vishakhapatnam 81.73 95.18 98.27 98.27 96.22 95.71
Source: IOCL