New Delhi: Retail prices of petrol and diesel in India are unlikely to see an immediate increase despite a sharp rise in global crude oil rates following recent military strikes on Iran and Tehran’s retaliatory actions.
International oil markets reacted strongly to the escalation, with Brent crude climbing nearly 9 per cent to around 80 dollars per barrel. US traded crude also rose 8.6 per cent to about 72.79 dollars from roughly 67 dollars at the end of last week. The surge has revived concerns about supply disruptions and higher energy costs worldwide.
However, domestic pump prices are expected to remain stable in the near term. Fuel rates have been unchanged since April 2022, with state owned oil marketing companies absorbing losses during periods of elevated crude prices and rebuilding margins when global rates moderate. Industry sources indicate that unless there is a prolonged and steep spike in crude prices, retail rates are unlikely to be revised immediately.
India imports nearly 88 per cent of its crude oil requirements, making it vulnerable to sustained volatility in international markets. The three major public sector fuel retailers, Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited, reported a combined profit of Rs 23,743 crore in the December quarter of the current financial year, reflecting improved margins during periods of softer crude.
Concerns have also resurfaced around the Strait of Hormuz, a vital route for nearly half of India’s oil imports. Disruptions or insurance constraints affecting tanker movement through the region could add pressure to supply chains.
Amid the evolving situation, Petroleum and Natural Gas Minister Hardeep Singh Puri reviewed the supply position of crude oil, LPG and other petroleum products. The government has reiterated that it is closely monitoring developments and will take necessary steps to ensure availability and affordability for consumers.
