Consumers get a raw deal as global oil price fall benefit remains ‘frozen’

14 FEBRUARY 2026

An analysis of official data shows that while global crude oil prices have fallen sharply since mid-2022, petrol prices in India have declined only marginally.
- June 2022 crude oil price (Indian basket) were around $116 per barrel and in February 2025 crude oil price is $67.9 per barrel
- There has been a 41.5% fall in crude price.
- However, petrol price in May 2022 were ₹96.7 per litre and in February 2025 is ₹94.8 per litre.
- There has been only 1.9% reduction in petrol price

Global Scenario

After Russia’s invasion of Ukraine in February 2022, crude oil prices surged above $100 per barrel.
Oil marketing companies (OMCs) raised petrol prices to ₹105.1 per litre in April 2022.
In May 2022, prices were fixed at ₹96.7 per litre.
Fuel prices remained largely unchanged for over 21 months, until March 2024.
This freeze marked a departure from the 2017 dynamic pricing policy, under which fuel prices were supposed to be revised daily based on international crude prices.

Role of Taxes

The modest 1.9% reduction was largely due to a ₹2 per litre excise duty cut in March 2024.
Without tax cuts, the base petrol price did not significantly decline.
In April 2025, excise duty was increased by ₹2 per litre, but this was reportedly not passed on to consumers.

Role of Oil Marketing Companies (OMCs)

The Ministry of Petroleum and Natural Gashas maintained in Parliament that fuel pricing is the exclusive domain of oil marketing companies.
- Major OMCs such as Indian Oil Corporation are responsible for fixing retail prices.
- Analysts argue that when crude prices rise, increases are often passed on to consumers.
- The situation raises questions about the implementation of dynamic pricing policy.