Why are the prices of petrol and diesel not decreasing? Companies are earning huge profit of Rs 11 per liter

We often hear in the news that the prices of crude oil have fallen in the international market, but when we go to the petrol pump, the prices do not seem to be decreasing. This question may often come to your mind that why is this so? The truth is that government oil companies like Indian Oil, Hindustan Petroleum and Bharat Petroleum are focusing more on increasing their profits rather than providing relief to customers.

The truth of bumper earnings from cheap oil

A recent report has made a shocking revelation. According to the report, Indian oil companies are earning huge profits of Rs 11.20 on every liter of petrol and Rs 8.10 on every liter of diesel. You can imagine how huge profits these companies must be earning daily! Actually, these companies are getting crude oil from Russia at very cheap rates. In the last few months, international prices of crude oil have been below $ 70 per barrel, but its benefits have not reached the common customers.

Companies earned thousands of crores

In the April-June quarter of this financial year, these three big government companies of the country have earned a total net profit of Rs 16,184 crore. Experts believe that this profit is much higher than expected and this trend is likely to continue in the future.

The earnings of companies are like this:

• Bharat Petroleum (BPCL): The company recorded a profit of Rs 6,124 crore.
• Indian Oil (IOC): The company earned Rs 5,689 crore.
• Hindustan Petroleum (HPCL): The company achieved a net profit of Rs 4,371 crore.

Mathematics of tax and subsidy

Tax is a major reason behind the change in prices of petrol and diesel. The government had imposed an additional tax of Rs 2 per liter on fuel in April this year. When crude oil prices fell, the government increased taxes to make up the difference, preventing consumers from getting cheaper oil. On the other hand, to reduce the burden of subsidy on LPG cylinders, the government has announced to give a subsidy of Rs 30,000 crore to the companies, so that the losses incurred from selling LPG can be compensated.