Prices of petrol and diesel have been de-regulated.
But additionally there are other parameters also. Dont have exact details on my fingers but can give a pointer.
In around 2009 the excise on crude was decreased from some 14.78% to 9.48.x% to control the fuel prices in domestic market. International prices of Brent crude were about $130 that time.
Recently 2 -3 months back when crude fell down to about $35 the Govt again increased the excise to about 14.x %.(Jan 2, 2015) Also there was some other surcharge which was increased 25%. Due to this the Govt was getting additional revenue of about 94k CR p.a. and oil companies were also getting a little more profit to make up for the losses. Also when Govt subsides fuel it does not pay the oil companies in cash. It issues them bonds.
In investment world there has to be a limit for any type of investment to control the risk. So oil companies already have tons of bonds. They are not really interested in more.
Apart from that state govt also increased local taxes and even the fuel pump owners increased their commission.
So you see how everything has a cascading effect on the end consumer's (our) pockets.
All this information is not correct to the last digit but this is what I recall of all the news articles I have read in the recent past. If anyone is interested in the details at a clinical level you can always do a little google search. All these facts are public and have been in news recently.
Even after so much of reasoning If we compare the ratio between international prices of Brent crude to domestic fuel prices then when crude was say $40 then petrol in Delhi should have cost about Rs50 or so.
So yes the prices did not come down as it should have but not all of that benefit has been wasted or gone in the pockets of politicians or oil companies.
Most of it went to the Govt treasury and someday (BIG HOPEFULLY) that money will be used for us in return
Apparently I was just reading about the decrease in demand for licenses of new petrol pumps yday or day b4 yday and it mentioned that the fuel consumption has gone down YoY. Could be due to the fact that this time last year the nation was busy in general elections.
Some Links if interested
1)
Increase in the exise duty
2)
From Telegraph - Multiple excise hikes.
3)
In India Tax is increasing not the Fuel price.
4)
India pumps up fuel taxes as crude prices fall.