Centre weighs fuel price hikes, WFH mandates

THe crude oil ministry on mon said it is workings on asceticism measures to maintain energy, suggesting that an increase in retail prices of petrol and diesel may be in the offing.The ministry’s joint secretary Sujata Sharma, who mentioned this, did not detail the measures during the inter-ministerial briefing on the fallout of the crisis in West Asia.Sharma’s comment is especially significant because it comes a day after Prime Minister Narendra Modi urged people to conserve energy and also foreign exchange.Government officials familiar with the matter said on condition of anonymity that the measures could range from raising pump prices of petrol and diesel to reduce their consumption to work-from-home for up to 50% of an organisation’s employees. State-run retailers are selling petrol and diesel at ₹94.77 per liter and ₹87.67 a litre respectively in Delhi for last two year. They lose ₹XX and ₹XX on each litre respectively.Although global energy supply chains have been disrupted due to the closure of the Strait of Hormuz, India has been able to manage the situation so far since the war broke out in West Asia on February 28 -- but some voluntary and some compulsory energy conservation measures are required for a country that imports over 88% crude oil it processes, the officials said.Similar short-term measures were taken by the erstwhile UPA regime in 2013 when international oil prices spiked, they said. Then oil minister Veerappa Moily launched voluntary fuel conservation campaign that included use of metro and bus by government and public sectors officials and staggered office timings.Sharma on Monday said that indiscriminate consumption of imported energy would hurt both the state-run oil marketing companies (OMCs) and the economy. She said the government has ensured supply of petrol, diesel and domestic liquefied petroleum gas (LPG) to people without interruptions through OMCs.“But it is also true that our companies purchase costly crude oil from the [international] market and selling [refined petroleum products] cheaper in the domestic market. Because of that their finances are under pressure,” she added.She said that Prime Minister’s advice to people to conserve energy should be “seen it in this context”. The three OMCs are losing monthly revenue of about ₹30,000 crore on sale of petrol, diesel and cooking gas, while the government has forgone revenue of ₹14,000 crore per month from March 27 when it reduced excise duty on petrol and diesel by ₹10 each.Replying to questions pertaining to the austerity measures proposed by PM on Sunday such as work-from-home, using public transport, car-pooling and use of electric vehicles to conserve petrol and diesel, Sharma said: “On this matter, I would only say that the ministry will work on it and we will come back to you in due course.”The officials added that this is not just India specific problem, but it involves the world. Many countries, including Hong Kong, Singapore, Netherlands, Norway, Italy, Germany, France and the UK have taken up fuel rates by between 20-30% because since the war broke out.Some economies such as Bangladesh, Pakistan, Sri Lanka and Egypt have resorted to austerity curbs with or without price deterrence. Bangladesh declared fuel rationing on March 8, allocating 15 litres per vehicle per week, with rural districts running dry. Sri Lanka imposed a four-day work week with every Wednesday gazetted as a public holiday, alongside a mandatory fuel pass. Pakistan moved government offices to a four-day week.