How a Surprise Petrol and Diesel Price Drop Rs 15.3 is Shaking Up the Lakshadweep Islands

Petrol and Diesel Price Drop Rs 15 in Lakshadweep :Residents of Lakshadweep Islands can rejoice! Their fuel woes have been eased thanks to a significant price reduction on petrol and diesel. The Indian Oil Corporation (IOC) has implemented a price cut of up to Rs 15.3 per litres across the islands.

Understanding the Price Reduction:

Previously, petrol and diesel prices varied within Lakshadweep itself. The islands of Andrott and Kalpeni faced a higher Retail Selling Price (RSP) compared to Kavaratti and Minicoy, primarily due to transportation costs. Fuel for Kavaratti and Minicoy is supplied directly through pipelines from depots on the island, while Andrott and Kalpeni rely on a less efficient method – barrel transportation from Kavaratti. The barreling process incurs higher costs, reflected in the previously higher RSP in those islands.

IOC’s Cost Recovery and Price Rationalization:

A key factor driving the price reduction is the completion of cost recovery for special infrastructure. The Indian Oil Corporation had previously included a cost element in the fuel price structure to recoup the capital expenditure incurred in setting up depots at Kavaratti and Minicoy. Since this cost has now been fully recovered, the IOC has removed this element, leading to a price reduction of approximately Rs 6.90 per litre (including VAT).

Bridging the Price Gap Between Islands:

Furthermore, the available price reduction margin (around Rs 7.60 per litre) has been strategically distributed across all four islands based on their sales volume. This aims to bridge the price gap that previously existed between Kavaratti/Minicoy and Andrott/Kalpeni.

The Impact:

As a result of these measures:

• Kavaratti and Minicoy will see a reduction of around Rs 5.2 per litre for both petrol and diesel.
• Andrott and Kalpeni will experience a more substantial decrease – Rs 15.3 per litre for both fuels.

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This price rationalization not only benefits consumers by making fuel more affordable but also promotes fairer pricing across all Lakshadweep islands.

Ministerial Appreciation:

Hardeep Singh Puri, India’s Oil Minister, expressed gratitude to the IOC for extending the benefits of cost recovery completion and inter-island price rationalization to Lakshadweep residents. This move is expected to have a positive impact on the lives of islanders and potentially stimulate economic activity.

Looking Ahead:

The fuel price reduction in Lakshadweep is a welcome development for the island’s inhabitants. It demonstrates the government and oil companies’ commitment to addressing regional price disparities and ensuring fair access to essential fuels. This price rationalization paves the way for a more level playing field across Lakshadweep, potentially leading to long-term economic benefits.