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The freeze on retail fuel prices by state-run oil marketing companies (OMCs) for almost a month marks a departure from the policy to align petrol and diesel rates daily by tactically using minor gains of falling international oil prices to offset the need to raise pump rates, three people aware of the development said, seeking anonymity.

The strategy was to avoid scrutiny by opposition parties when Parliament was in session, a government official and two company executives said. As the monsoon session of Parliament is now over, the OMCs may gradually resume daily price revisions, they said.

The session, starting 19 July, ended two days ahead of schedule on 11 August. The companies stopped daily revision of pump prices of petrol and diesel days ahead of the session.

While the retail price of diesel was frozen on 15 July at 89.87 per litre in Delhi, petrol prices have remained flat at 101.84 a litre since 17 July.

However, over the past one month, international oil prices saw wide fluctuations with Brent crude prices falling from $73.47 per barrel on 15 July to $68.62 on 19 July only to jump by 10.8% to $76.05 on 29 July. Brent prices fell again to $69.04 a barrel on 9 August, down over 9.2%, before bouncing back to above $70 last week, and closed the last trading session on Friday at $70.59 a barrel with a fall of about 1%.

Despite international oil prices seeing high volatility, state-run retailers neither cut nor raised pump rates in India, despite the government maintaining that OMCs follow a daily pricing policy.

In a written reply to the Rajya Sabha on 4 August, minister of state for petroleum Rameswar Teli said: “Effective 16 June 2017, daily pricing of petrol and diesel has been implemented in the entire country. Daily pricing has been introduced to bring more transparency and efficiency in pricing to benefit consumers."

Email queries to three state-run retailers—Indian Oil Corp. (IOC) Ltd, Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—and the petroleum ministry did not elicit any response. The three companies enjoy a monopoly in the domestic fuel retail market with about 90% combined market share.

Domestic petrol and diesel rates were on the rise since 4 May, a day after the results of five assembly polls were declared. The price rally saw petrol becoming dearer by 11.44 a litre in 41 sessions and diesel by 9.14 since 4 May.

Fuel rates jumped to historic highs and petrol crossed 100 a litre mark in several places for the first time. While fuel rates of IOC in Delhi are considered a benchmark for India, retail prices of auto fuels differ due to state taxes.

While international oil prices influences pump rates of auto fuels as India imports more than 80% of its crude requirements, steep taxes are responsible for the high rates of petrol and diesel. As on 1 August, in Delhi for instance, central levies accounted for 32.3% of the price of petrol, while state taxes accounted for 23.07%, official data showed.

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