State-run oil companies on Friday raised petrol and diesel prices by Rs 3 per litre each, marking the first revision in retail fuel rates since April 2022. The move comes as the ongoing West Asia conflict continues to push global crude oil prices higher and disrupt energy supply chains.
In Delhi, petrol is now priced at Rs 97.77 per litre, while diesel costs Rs 90.67. Prices remain higher in several Metro cities because of local taxes and levies. Petrol is selling at Rs 108.74 in Kolkata, Rs 106.68 in Mumbai and Rs 103.67 in Chennai. Diesel prices stand at Rs 95.13 in Kolkata, Rs 93.14 in Mumbai and Rs 95.25 in Chennai, per a report by Hindustan Times.
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Compressed natural gas (CNG) prices have also been revised. Indraprastha Gas Ltd (IGL) increased CNG rates by Rs 2 per kg across Delhi-NCR and nearby regions. CNG now costs Rs 79.09 per kg in Delhi, Rs 80.70 in Noida, Rs 84.12 in Gurugram and Rs 88.44 in Ajmer, per HT.
Many two-wheelers queue up at an Indian Oil petrol pump amid fuel shortage and price hike concerns, in Bhubaneswar, on Friday. ANI Crude prices remain elevated
The increase follows a sharp rise in international crude prices since the start of the US-Iran conflict. Benchmark Brent crude, which was trading at $72.87 per barrel on February 28, climbed as high as $118.03 by April 29. Though prices eased slightly afterward, Brent was still trading at $108.55 per barrel on Friday.
At the same time, the Indian rupee has weakened significantly against the US dollar, touching a record low of Rs 95.74 on Friday. The fall in the rupee has further increased the cost of crude imports for India.
Oil firms still under pressure
Despite the hike, oil marketing companies are still facing heavy losses on fuel sales.
Prashant Vasisht, senior vice president and co-group head, Corporate Ratings at ICRA Ltd, was quoted as saying by HT, "The modest hike in retail price of ₹3 per litre for petrol and diesel provides limited relief to the oil marketing companies.
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A Bharat Petroleum attendant fills fuel into a vehicle at a petrol pump, in New Delhi, on Friday. ANI ICRA estimates that at crude price of $105–110 per barrel, and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about ₹500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike.
Accordingly, the oil marketing companies would need to relook at the retail prices in case elevated crude oil prices persist."
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Government balancing supply and exports
The Centre had earlier cut excise duty on petrol and diesel by Rs 10 per litre each on March 27 to reduce the burden on consumers. However, officials later said the relief was not enough as the conflict continued and supply disruptions intensified.
According to PTI, the finance ministry said the export duties imposed on petroleum products were meant to discourage exports and ensure adequate domestic fuel availability at a time when high global prices made overseas sales more profitable for refiners.
