Petrol And Diesel Prices For 3rd Time In 8 Days: Petrol Now At Nearly Rs. 100/Liter In Delhi
In the space of eight days, petrol and diesel prices have been raised three times. The cumulative increase is now close to Rs 5 per litre.
In Delhi, petrol has reached Rs 99.51 per litre, while diesel is at Rs 92.49. Mumbai is higher, with petrol at Rs 108.49 and diesel at Rs 95.02. Kolkata is higher still, with petrol at Rs 110.64 and diesel at Rs 97.02.
The sequence of hikes tells its own story. The first increase was Rs 3 per litre, the largest single move. That was followed by another increase of around 90 paise. The latest revision added 87 paise per litre to petrol and 91 paise per litre to diesel in Delhi.
This is the first big retail fuel-price movement in years, and it has come quickly.
The main reason is the rise in global crude oil prices. International crude prices have stayed above $100 a barrel because of tensions in West Asia and wider supply concerns.
India imports most of the crude oil it consumes, so global price shocks feed directly into domestic fuel economics. Oil marketing companies had kept pump prices stable for months while absorbing losses. That could not continue indefinitely once crude stayed elevated.
State-run oil companies together operate more than 90 percent of the country’s fuel stations. They are now raising prices gradually to recover part of their losses. BPCL had indicated that it was losing Rs 25 to Rs 30 per litre on diesel and Rs 10 to Rs 14 per litre on petrol before the increases began.
The government has said there are no plans to directly subsidise those losses. That means more of the cost pressure is now moving to consumers.
One factor that helped India in the past two years was discounted Russian crude. Cheaper Russian oil gave Indian refiners some breathing room when global crude prices were high.
That cushion has become less reliable. The discount on Russian oil has narrowed, and uncertainty around sanctions has added to procurement risk. Even where Russian crude remains available, the advantage is not as large as it was earlier.
This matters because India’s retail fuel prices had been kept stable despite global volatility. Once the import-cost buffer weakens, oil companies have less room to absorb losses.
The latest price hikes should therefore be seen as delayed adjustment rather than a sudden isolated move.
For a petrol car with a 45-litre tank, the cumulative increase of around Rs 4.77 per litre adds about Rs 215 to a full tank compared with the pre-hike price.
For a diesel vehicle with a 60-litre tank, a Rs 4.81 per litre increase adds around Rs 289 to a full tank.
These are not dramatic amounts in a single visit to the fuel station. The impact becomes clearer over a month. A petrol car covering 1,500 km a month at 15 kmpl uses about 100 litres of fuel. At Rs 99.51 per litre in Delhi, that works out to about Rs 9,951 a month. Before the recent hikes, the same usage would have cost roughly Rs 9,470.
That is about Rs 480 extra a month for this usage pattern.
Diesel price increases affect more than private car owners. Diesel is widely used by trucks, buses, agricultural equipment and commercial vehicles.
When diesel rises, freight costs can rise. That can feed into the price of vegetables, grains, construction material and other goods moved by road. The effect is not immediate everywhere, but sustained diesel price increases usually add pressure to inflation.
This is why diesel prices are politically sensitive. A small increase at the pump can travel through the economy through logistics and public transport.
The current round of hikes also comes at a time when bulk diesel buyers have been trying to use retail pumps because retail prices are cheaper than bulk supply rates. That has already strained some fuel stations in certain areas.
Private fuel retailers are already selling petrol at much higher prices in some markets. Shell, for example, has been selling petrol above Rs 115 per litre in certain locations.
That shows the gap between controlled retail pricing at state-run pumps and market-linked pricing elsewhere. If crude remains above $100 for a long period, state-run oil companies may need more price revisions to narrow their losses.
For now, the government has said supply is adequate and has urged buyers not to panic-buy. The issue is not availability. It is pricing.
Whether fuel prices stabilise depends on crude oil. If Brent crude cools, oil companies may slow or pause further hikes. If crude remains high, more increases are possible.
For consumers, the immediate impact means every litre now costs more, and the increases have come fast. For the wider economy, diesel is the number to watch because it affects transport and goods movement.
Petrol being close to Rs 100 in Delhi is the headline. Diesel moving steadily higher is the number that may matter more over the next few weeks.