Crude Oil Now Cheaper Than Milk and Curd: Will Petrol and Diesel Prices Drop Too?

April 15, 2025

Crude Oil at ₹33/Litre vs Milk at ₹55: A Surprising Price Paradox

In a surprising twist for consumers, crude oil prices in India have fallen below the price of milk and curd. Currently, a litre of toned milk is priced at ₹55–₹57, and a kilo of curd costs ₹70–₹75, while one litre of crude oil is approximately ₹33.40. Despite this dramatic drop, petrol continues to retail at over ₹100 per litre in major Indian metros, and diesel prices remain above ₹90/litre.

This contrast raises an important question — if crude oil is this cheap, why aren’t fuel prices reflecting the decline?

Crude Oil Prices: India and Global Snapshot

As of the latest data:

• Brent Crude (Global Benchmark): $65.36 per barrel

• WTI Crude (U.S. Benchmark): Below $65

• Crude Oil Price in India:

  • Current (April 11): ₹5,310/barrel

  • Equivalent per litre: ₹33.40

  • Previous high (Jan 21): ₹6,525/barrel

  • Price drop since January: ₹1,395 per barrel

With 159 litres in a barrel, this significant price correction has prompted fresh demands for lower petrol and diesel prices, especially as global rates remain soft.

Government Action & OMCs’ Response: Where’s the Relief?

Recently, Petroleum Minister Hardeep Singh Puri acknowledged the potential for a price cut, stating that oil marketing companies (OMCs) can reduce fuel prices if they wish. However, instead of passing on the benefit to consumers, the government increased the excise duty by ₹2 per litre, absorbing potential gains for the exchequer.

What this means:

• OMCs are earning better margins due to lower crude costs.

• Consumers, however, have not seen any major relief at the pump.

• The ₹2 excise adjustment has offset the possible retail price reduction.

Experts argue that the government has prioritized revenue over consumer benefit. The lowered cost of crude oil could have translated to a price cut of ₹4–5/litre, but taxation policies have neutralized that possibility — at least in the short term.

Why Fuel Prices Stay High Despite Cheap Crude

High Central and State Taxes:
Almost 50–55% of the fuel price comprises taxes.

Retail Pricing Formula:
Based on 15-day rolling average of global crude prices, and includes freight, marketing margins, dealer commissions, and more.

Strategic Reserves and Supply Chain Costs:
Import costs, storage, and logistics also impact final pricing.

Conclusion: Relief May Take Time

Despite the fall in crude oil prices — now even cheaper than daily essentials like milk and soft drinks — petrol and diesel prices may not reduce immediately. Until the government decides to pass on the benefit or oil companies initiate a cut, consumers will likely have to wait.

As things stand, the biggest beneficiaries of cheaper crude are the government and oil companies, not the everyday consumer.