India hikes fuel prices by just Rs3 for first time in four years
India’s state-run oil refiners increased petrol and diesel prices after facing heavy financial pressure from soaring global crude oil rates. The latest move came as the Iran conflict pushed international oil prices sharply higher in recent weeks.
Petrol and diesel prices increased by more than 3%, although global Brent crude prices have jumped nearly 50% since the conflict began. In New Delhi, petrol now costs Rs97.77 per litre, while diesel prices reached Rs90.67 per litre.
The latest increase has pushed fuel prices to their highest level since May 2022. Many experts believe this may only be the beginning if crude oil prices continue rising in international markets.
Brent crude prices climbed close to $110 per barrel, putting additional pressure on India’s government-run oil marketing companies. Analysts said companies were absorbing losses for months but can no longer handle rising import costs for a longer period.
Experts warned that petrol and diesel prices could continue rising over the next three to four months if crude oil remains between $90 and $100 per barrel. They said the recent Rs3 increase offers only limited relief to companies dealing with under-recoveries.
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Energy experts estimated that every Rs1 increase in fuel prices could improve annual earnings of public sector oil firms by around Rs15,000 crore to Rs16,000 crore. Some analysts believe fuel prices may still need another increase of nearly Rs10 per litre if global oil prices remain unstable.
India imports nearly 85% of its crude oil requirements, making the country highly dependent on international energy markets. Concerns over possible disruption in the Strait of Hormuz have also increased fears of global oil supply shortages.
The fuel price hike may also affect transportation costs and prices of daily-use items in coming months. Economists warned that inflation pressure could increase further if global crude prices do not cool down soon.
The latest fuel hike shows how strongly global conflicts can affect local markets and public expenses. If crude oil prices remain high, people may face more pressure on travel costs and household budgets in the months ahead.
