Oil Firms Cut Prices of Commercial LPG and Jet Fuel Amid Global Crude Slump

BILKULONLINE

New Delhi, May 1: Public sector oil companies on Thursday announced a reduction in fuel prices, slashing the cost of commercial LPG cylinders by ₹14.50 and cutting aviation turbine fuel (ATF) prices by 4.4%.

The price of a 19-kg commercial LPG cylinder has been revised downward, while ATF now costs ₹85,486.80 per kilolitre, marking a decrease of ₹3,954.38 per kl. This move comes as a relief for airlines such as IndiGo and Air India, where fuel makes up roughly 30% of operational expenses.

This is the second consecutive reduction in ATF prices, following a steeper 6.15% (₹5,870.54 per kl) cut on April 1, effectively reversing the price hikes seen earlier in the year.

The reductions coincide with a global dip in crude oil prices, with benchmark Brent crude hovering around $63 a barrel – the lowest level since April 2021. The decline is attributed to reduced global demand amid an economic slowdown. Saudi Arabia’s stance of not initiating further supply cuts signals a shift that may limit the influence of OPEC on global oil prices.

For India, which imports approximately 85% of its crude oil, the drop in prices is economically favorable. It helps reduce the country’s import bill, narrows the current account deficit (CAD), and supports the strength of the rupee. Additionally, lower crude prices contribute to decreased domestic fuel costs, thereby helping to ease inflationary pressures.

Despite the price relief, the government last month raised excise duties on petrol and diesel to boost revenue. Petroleum Minister Hardeep Singh Puri clarified that state-owned oil marketing firms—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—will absorb this additional burden, benefiting from the reduced crude oil costs.

India remains the world’s third-largest importer of oil, and these developments are likely to have a positive ripple effect across the economy.