Regulated freedom

Fuel pricing needs certain checks and balances, without undermining profitability of oil firms

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Y OCTOBER 2014, a process to deregulate the pricing of petrol and diesel was formally completed. The decontrol had been in the offing for several years before it was initiated by the then United Progressive Alliance II government in June 2010. The final push apparently came from the decision of private-sector companies, notably Reliance Industries, to shut all their retail outlets, as they could not match the subsidised prices at which these products were sold by state-run oil marketing companies (OMCs). For sure, the decision was hugely beneficial for the central exchequer and state-owned upstream oil companies, as fuel subsidies have since been contained in great measure. They peaked at close to ₹1 lakh crore in FY13, but has since fallen steeply — the revised estimate for FY25 is ₹14,700 crore, and the Budget estimate for FY26 is ₹12,100 crore.