By Admin 
Samajwadi Party (SP) President Akhilesh Yadav said that UP-Punjab elections can be held in November 2026 and if the government wants, it can also be held in September. Meanwhile, Union Petroleum Minister Hardeep Singh Puri also said on July 2 that there could be a big change in the prices of petrol and diesel in 2-3 months. If we look at the old trends, the result is that the government can again reduce the oil prices before the elections. Besides, it will also be the occasion of Dussehra-Diwali. But when crude oil has fallen from $100 per barrel to $65, why did petrol and diesel not become cheaper? After all, why cheap oil is not coming into the tank of your car immediately and when will that expensive stock taken from Iran end, you will know in the explainer…
Why did the government tell to wait for 2-3 months?
This issue is not just about the international prices of oil, but about the inventory cycle i.e. oil stocks of the oil companies. When the government said, ‘The situation will clear up in 2-3 months’, it simply means that the oil that is being refined at present is the same old and very expensive purchased oil. Until this old stock is exhausted, companies will not be able to pass on the benefit of purchasing cheap oil to you.
Which is that ‘expensive crude oil’ and how much is left?
The period between October 2025 and April 2026 was very turbulent for the oil market. Due to the Iran-Israel war, crude oil (Brent crude) had crossed 100 to 110 dollars per barrel several times. Since India imports more than 85 percent of its oil needs, government oil companies like IOC, BPCL and HPCL had made huge stocks of oil at these high prices to maintain uninterrupted supply.
According to experts, oil companies usually have 45 to 60 days of commercial inventory stock. Now in July 2026, we are in a situation where the last expensive oil purchased in April-May is being refined. A major part of this stock will be consumed by the end of August and by September-October, refineries may start processing only cheaply purchased crude oil. The Petroleum Minister’s time limit of 2-3 months exactly reflects this stock rotation period.
Mathematics of loss of Rs 74,781 crore: How did this happen?
Hardeep Singh Puri said that in the first quarter (April-June 2026), government oil companies have suffered a huge loss of Rs 74,781 thousand crore. This loss is no small matter:
- Purchase Price: The average price of crude oil that companies bought earlier was around $100 per barrel.
- Current Market Price: When that oil is being refined and sold in the market, the price of crude oil in the international market has fallen to $65-70 per barrel.
- Under-recovery: This means that companies are buying oil for $100 and selling petrol and diesel made from it at the current price of $65. Heavy losses are being incurred on every barrel. Overall, this under-recovery stood at more than Rs 74 thousand crore at the end of the quarter.
The government argues that the companies which gave cheap oil to the public after suffering losses during the Corona period and previous crises, will now have to be given a chance to recover.
When will expensive oil end and when will cheap oil start?
This is the most important timeline of the entire explainer. Crude oil has become cheaper continuously in the international market since May 2026. There were two big reasons for this:
1. The fear of supply ended due to the news of ceasefire between Iran and Israel.
2. Due to slowdown in China’s economy, global demand for crude oil reduced.
Timeline of introduction of cheap oil:
- At the end of May 2026, government companies started booking oil at the rate of $ 68-72 per barrel.
- This oil takes 20-30 days to reach India’s ports and refineries. Meaning it started reaching the refineries from the beginning of July.
- The old expensive stock is already present, hence the cheap oil is not being processed now, but is lagging behind in the stock.
- From late August to early September, refineries will start processing mainly cheap crude.
- By October i.e. Dussehra, the entire system will have shifted to cheap oil.
How will prices change in 2-3 months?
If we understand the estimates of experts and the meaning of Hardeep Singh Puri’s statement, then by October 2026 the oil companies will have completely come out of losses. As soon as the balance sheets of the companies are in order, the government and the companies will have full scope to reduce prices.
According to the estimates of industrial experts, if the prices of crude oil remain stable between 65-75 dollars, then a reduction of 8 to 12 rupees per liter in the retail prices of petrol and diesel is possible. It will also depend on whether the government compensates the loss by a slight increase in excise duty or directly provides benefits to the public. At present the signs are of relief only.
What will be the impact on petrol pump owners and common man?
According to media reports, petrol pump owners will also benefit from the fall in oil prices as their working capital pressure will reduce and sales will increase. But the real benefit will be available to the common people when this big relief on inflation will come during the festival seasons like Dussehra and Diwali.
The overall gist is that there is no conspiracy behind not immediately cutting the prices of petrol and diesel, but there is a solid mathematics of inventory management. Government oil companies are currently refining old oil worth $100 per barrel and selling it at $70, resulting in a loss of Rs 74,781 crore.
This expensive stock will be exhausted by August-September and by October i.e. Dussehra, cheaper crude oil will start being processed in the refineries. Then there is every possibility of a big fall in the prices of petrol and diesel by Rs 8 to 12. The government’s statement of waiting for 2-3 months is based on this mathematics.