New Delhi [India], March 27 : The recent reduction in excise duty on petrol and diesel will mainly help oil companies absorb their losses and prevent an immediate rise in fuel prices, said Ajay Bansal, President of the All India Petroleum Dealers Association (AIPDA), on Friday.
Speaking to ANI, Bansal said the relief provided by the Centre is aimed at offsetting the financial losses currently faced by oil marketing companies.
"The relief provided within the excise duty, specifically the reduction implemented by the Central Government, has a primary objective: to offset the financial losses currently being incurred by the oil companies," Bansal said.
He added that the revenue foregone through the excise duty cut will help companies cover their losses rather than increasing prices for consumers.
"The revenue foregone through this excise reduction will directly benefit our oil companies... it will serve to cover their existing losses, thereby allowing them to avoid recovering those funds from the general public through price hikes and, consequently, providing indirect relief to the common man," he said.
Bansal noted that oil companies are currently selling petrol and diesel at significant losses due to rising global crude oil prices and currency pressures.
"Today, there is a loss of Rs 45 to Rs 50 per litre. So, there is a need to increase the price in their RSP," he said.
He explained that international crude prices and the weakening of the rupee against the US dollar are increasing the cost burden on companies.
"Today, the value of our currency is falling against the dollar. Secondly, the price of crude oil is increasing. So, the impact of both is coming on the price, and the loss of oil companies is increasing," Bansal said.
According to him, while the public may not see an immediate price reduction, the excise duty cut will help prevent price hikes.
"The general public will neither benefit nor harm. The general public will only benefit from the fact that their prices will not increase. Now, there is less chance of the price of petrol and diesel to increase," he said.
On fuel availability, Bansal assured that there is no shortage of petrol or diesel across the country and urged people not to panic buy.
"One thing was definitely seen, it was confirmed that there is no shortage of any kind in any supply in the coming days. This shortage is neither increasing nor will it be," he said.
He also appealed to the public not to spread rumours about fuel shortages or price spikes.
"So, there should be no panic buying. There should be no such rumour that the prices are going to increase... for the time being, there will be no shortage of petrol and diesel," he said.
"For the public, our pumps are fully open. They are open 24 hours. We will not let them have any kind of problem. I will assure you of this," he added.