Question : Impact of Coronavirus on Crude Oil Prices

(a) whether the global outbreak of Coronavirus has led to prices of crude oil plunging in the
world market, if so, the details thereof and the likely fallout on India‘s import of crude oil;
(b) whether India has purchased huge tonne of crude oil when the prices of crude oil plunged in
the world market and if so, the quantum of foreign exchange saved;
(c) whether the Government will consider reducing the prices of petrol and diesel as a result of
prices coming down in international market, if so, the details thereof and the reasons therefor;
(d) wheher constant increase in prices of petroleum products in the country has cascading effects
on the overall prices on essential commodities; and
(e) if so, the details thereof and the corrective steps taken by the Government in this regard?

MINISTER OF PETROLEUM AND NATURAL GAS
(SHRI DHARMENDRA PRADHAN)
(a) The monthly average price of Indian Basket of Crude oil since January 2020 till date is
given below:
Period Indian Basket of Crude Oil ($/bbl)
January-2020 64.31
February-2020 54.63
March-2020 33.36
April-2020 19.90
May-2020 30.60
June-2020 40.63
Period Indian Basket of Crude Oil ($/bbl)
July-2020 43.35
August-2020 44.19
September-2020 (till 9th September
2020)
42.42
The month wise details of crude oil import during January-July 2020 as compared to
January-July 2019 is given as Annexure.
(b) The event of COVID 19 resulted in lockdown with increasing supply of crude oil
in international market. Taking advantage of the low crude oil prices, India purchased
16.71 Million bbls of crude in April – May, 2020 and filled all the three Strategic
Petroleum Reserves created at Vishakhapatnam, Mangalore and Padur. The average
cost of procurement was US $ 19 per bbl as compared to US $ 60 per bbl prevailing
during January, 2020, thus saving US $ 685.11 Million which amounts to Rs. 5069
crores at an exchange rate of Rs. 74/- per US $.
(c) Prices of petrol and diesel have been made market-determined by the Government
with effect from 26.06.2010 and 19.10.2014 respectively. Since then, the Public Sector
Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and
diesel in line with international product prices and other market conditions. Oil
Marketing Companies take a decision on retail selling price after considering various
aspects including international product prices, exchange rate, tax structure, inland freight
and other cost elements.
(d) & (e) Petrol and Diesel prices are market-determined and increase or decrease
according to market trend. The prices of transport fuels from a part of the Wholesale
Price Index. The weightage of petrol and diesel in the WPI index is 1.60% and 3.10%
respectively.
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