Petrol and diesel prices have been slashed by up to ₹15.3 per litre in the islands of Lakshadweep after Indian Oil Corporation removed a cost element that was imposed to recover expenditure on special infrastructure to transport fuel to the remote islands.
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Petrol and diesel prices have been reduced by ₹15.3 per litre in Andrott and Kalpeni islands and ₹5.2 a litre for Kavaratti and Minicoy in Lakshadweep islands, the Oil Ministry said in a post on X, citing information from IOC.
Petrol price in Kavaratti and Minicoy has been cut to ₹100.75 per litre from ₹105.94 previously and that on Andrott and Kalpeni to ₹100.75 a litre from ₹116.13. Similarly, diesel rates have been revised to ₹95.71 a litre in Kavaratti and Minicoy from ₹110.91 earlier and to ₹95.71 in Andrott and Kalpeni from ₹111.04 previously.
The new rates are effective from March 16.
"In Lakshadweep, IOC is supplying petrol and diesel to four islands: Kavaratti, Minicoy, Andrott and Kalpeni. IOC has depots at Kavaratti and Minicoy. The product at these depots is supplied from the IOC depot in Kochi, Kerala.
"Retail outlets at Kavaratti and Minicoy are supplied directly through pipelines from our depots. Other two islands, Andrott and Kalpeni, are supplied from the Kavaratti depot through barrels," the Ministry said in the post.
This element amounting to ₹6.90 a litre had been included in the price buildup of petrol and diesel for the recovery of capital expenditure made in depots at Kavaratti and Minicoy in the Lakshadweep islands, due to very low and unviable volumes.
This element has been included in prices for the last three years.
"Since the full recovery of capital expenditure has now been achieved, this element is being removed from the prices of petrol and diesel," the Ministry said.
"This will reduce the retail selling price of petrol and diesel by around ₹6.90 a litre (₹7.60 per litre including 10 per cent VAT), providing benefits to the customer." Due to barreling costs, markets of Andrott and Kalpeni had higher RSP by around ₹10 per litre compared to Kavaratti and Minicoy.
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“To equate the price of all islands, the available margin of ₹7.60 a litre has been distributed across the four islands based on their sales volume,” it said. “This will result in a reduction of retail selling price of petrol and diesel at the main islands, namely Kavaratti and Minicoy, by around ₹5.2 a litre. In the other islands, namely Andrott and Kalpeni, the retail selling price will be reduced by around ₹15.3 per litre.” Oil Minister Hardeep Singh Puri in a post on X, thanked IOC ‘for extending the benefits of completion of cost recovery of capital expenditure and inter-island price rationalisation to the people of Lakshadweep by reducing fuel prices.’ ‘The move will improve #EaseofLiving and #EaseofBusiness for the people and ensure a bright future for the islands, which are poised to become major hubs of global tourism. Truly #ViksitBharat,’ he said. ‘It is #ModiKiGuarantee that all parts of the country benefit from good governance.’