Petrol-Diesel Price: OMCs are still incurring a loss of about Rs 5.5 per liter on petrol and Rs 4.5 per liter on diesel, which in total is about Rs 610 crore per day.

Fuel prices may rise by Rs 5 per litre.

Petrol-Diesel Price Hike: Amid the ongoing war in Iran and tensions in West Asia, petrol and diesel prices in India have been raised four times in the past month. Following these hikes, petrol and diesel have become more expensive by a combined ₹7.5 per liter. This price hike comes after a four-year hiatus due to tensions in the Middle East.

However, despite this price increase, state-owned oil companies are still losing approximately ₹5.5 per liter on petrol and approximately ₹4.5 per liter on diesel. Combined, the companies are still incurring losses of over ₹550-600 crore per day, which is not sustainable in the long run.

Will there be another increase of Rs 5?

ICRA and financial analysts believe that if oil companies are to achieve a "no profit, no loss" situation, retail prices may need to be increased by another ₹5 per liter. Analysts are calling this increase necessary, but the government is refraining from immediately allowing oil companies to implement the full price hike to control retail inflation. Alternatively, the government has attempted to absorb this burden by reducing excise duty slightly.

Crude oil prices

India imports approximately 85% of its crude oil needs from abroad. Currently, Brent crude is hovering around $92-95 per barrel. This price level is acceptable for Indian oil companies, and they don't feel any immediate need to raise retail prices. Oil companies typically face pressure to raise prices when crude oil crosses $100 per barrel and remains at that level for several weeks. Currently, there is no such critical situation.