Petrol and Diesel: To protect the country's citizens from global instability, the government has kept petrol and diesel prices unchanged. This is causing losses for fuel retailers.

petrol-diesel

Petrol and Diesel Prices: Amid the ongoing war in Iran, petrol and diesel prices in India have remained stable for a long time. Due to the surge in global crude oil prices, many countries have already passed on the increased costs to consumers.

Meanwhile, retail prices of petrol and diesel in India have remained unchanged for a long time. This has resulted in significant losses for fuel retailers, who are losing ₹20 per liter on petrol and ₹100 per liter on diesel.

Refineries running in losses

On one hand, the government is protecting the customers from fluctuations in petrol and diesel prices by keeping them stable amid global uncertainty, due to which fuel retailers are incurring losses.

According to a Hindustan Times report, experts, speaking on condition of anonymity, said that if the West Asia crisis continues for a long time and oil prices in the international market remain at $70-80 per barrel, it may be difficult for oil refining companies to withstand such fluctuations.  

Is the price of petrol and diesel going to increase?

Industry insiders hope that if the international crude oil prices continue to fluctuate, oil companies may pass on some of the revenue loss on petrol and diesel to consumers sometime after the assembly elections.

Benchmark Brent crude, which was trading at $72.87 a barrel before the Iran war began, surged nearly 40% to $101.91 a barrel on Wednesday and crossed $103 a barrel on Thursday.

What is the government saying?

Kotak Institutional Equities recently stated in a sector note that amid rising crude prices, it is becoming increasingly difficult for retailers to maintain the current freeze on fuel prices any longer. Consequently, domestic petrol and diesel prices could see a significant increase of ₹25–₹28 per liter after the assembly elections, which are ongoing until April 29th, conclude.

However, the government has categorically denied this. Sujata Sharma, Joint Secretary in the Petroleum Ministry, has stated that despite the surge in international prices, the government has no proposal to increase retail prices by ₹25-₹28. The government has advised the public not to pay heed to rumors circulating on social media, which are being spread with the intention of creating panic.