The ongoing war in West Asia between US and Iran is taking a continuous toll on the prices of fuel. It seems that the rise will continue if the war goes on.
Petrol and diesel prices were raised by 87-91 paise per litre on Saturday, taking the cumulative increase in retail fuel rates to nearly Rs 5 a litre in under 10 days as state-owned firms passed on soaring international oil prices.
The latest revision pushed petrol prices higher by 87 paise per litre and diesel by up to 91 paise across the country, according to industry sources.
The back-to-back increases follow a prolonged freeze in retail fuel prices and come amid elevated crude oil prices in the global market, tightening refining margins, and a weaker rupee, which have sharply raised the cost of imports.
The petrol price was increased by 87 paise in Delhi to Rs 99.51 per litre from Rs 98.64 earlier. Similarly, diesel price was hiked by 91 paise to Rs 92.49 a litre from Rs 91.58 previously.
With the latest hike, petrol and diesel prices have risen close to Rs 5 a litre since the state-owned oil marketing companies on May 15 ended the hiatus in rate revision, stoking concerns over inflationary pressures and higher transportation costs across the economy.
Petrol and diesel prices were increased by Rs 3 per litre each on May 15 and 90 paise a litre on May 19.
On all three occasions, private fuel retailers like Nayara Energy swiftly matched the price increases announced by their state-owned rivals, raising petrol and diesel rates by a similar quantum.
The latest increases came on top of hikes effected earlier by private retailers ahead of the first fuel price revision on May 15 by state-run oil companies.
Nayara Energy had raised petrol and diesel prices by Rs 5 and Rs 3 per litre, respectively, in March, while Shell increased petrol prices by Rs 7.41 a litre and diesel by as much as Rs 25 per litre from April 1.
Jio-BP, the fuel retailing joint venture of Reliance Industries Ltd and BP Plc, has, however, moved rates at its pumps in tandem with PSUs.
After Saturday’s increase, petrol at PSU pumps in Mumbai now costs Rs 108.49 per litre and diesel Rs 95.02, while Kolkata prices rose to Rs 110.64 and Rs 97.02, respectively. In Chennai, petrol is priced at Rs 105.31 and diesel at Rs 96.98.
Prices vary across states due to local taxes.
State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) together control 90 per cent of India’s fuel market.
The back-to-back increases come after global crude oil prices surged more than 50 per cent since late February, following US-Israeli strikes on Iran and disruptions to shipments through the Strait of Hormuz, a critical global oil transit route.
Fuel retailers had kept pump prices low despite rising input costs, a move the government said was aimed at shielding consumers from inflation.
Opposition parties, however, accused the government of delaying price revisions until after key state elections.
The May 15 increase came after the ruling Bharatiya Janata Party (BJP) expanded its electoral footprint by winning three of five state and UT elections, including West Bengal.
Despite the hikes, fuel retailers continue to absorb significant losses.
Petroleum Ministry’s Joint Secretary Sujata Sharma had earlier this week stated that the May 15 increase reduced losses by about a fourth, but state-run oil firms were still losing around Rs 750 crore per day.
According to Crisil, oil marketing companies were losing about Rs 10 per litre on petrol and Rs 13 per litre on diesel even after the earlier hike.
Petrol and diesel prices are now at their highest levels since May 2022.
Rates had remained frozen since April 2022 except for a Rs 2-per-litre cut in March 2024 ahead of national elections.
