With the evolving international situation, the IOC, BPCL. and HPCL will be deciding the revised rates in a couple of days.
Thanks to the International crisis, the petrol and diesel prices are expected to go up. There was speculation that the price hike will take place after the culmination of the multi-phase polling in Uttar Pradesh. However, so far, the price have remained stable. Reportedly, the Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are still on wait-and-watch mode on international oil prices. We are likely to get the revised rates in a couple of days. Let’s take a detailed look!
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Currnetly, the International oil prices are at a 13-year high of USD 140 per barrel this week. India relies on overseas purchases to meet about 85 per cent of its oil requirement and the Indian rupee is currently at a record low of 77 to a dollar. The basket of crude oil rose above USD 126.36 per barrel on March 7 (up from USD 81.5 per barrel in November). As per industry experts, to break even, the fuel retailers need to increase Petrol and diesel prices by Rs 15 a litre. Experts claim that the Indian government will have to announce a hike due to the ongoing international conflict, as soon as the polling ends.
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Over the last two years, the furel prices have been steadily increasing in India. However, the there has been a freeze on the price for the past four months. This has been attributed to the ongoing polls in five states, including politically significant Uttar Pradesh. There was a genuine worry about the price increase and its political fallout. The central government also cut excise duty on petrol by Rs 5 per litre and on diesel by Rs 10 a litre. Most state governments have also lowered local sales tax or VAT. Hence, the rates have have been stable despite international oil price going from USD 81.5 per barrel in early November to almost USD 140 per barrel on Monday. While the polling in Uttar Pradesh ended on Monday, as per last night, the price of petrol was Rs 95.41 per litre in Delhi. On the other hand, the Diesel can be purchased at Rs 86.67 a litre.
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Unfortunately, we are likely to see revised rates pretty soon since the government has been incurring losses for a while. Ever since the Russian-Ukraine conflict, International oil prices have been on the rise. There is a genuine fear that the oil and gas supplies from Russia could be disrupted any time. The PSUs and the oil ministry have gone through marathon meetings so far. While they are still determining “if the current spike in international oil prices is a temporary phenomenon or is it here to stay,” we are just being eased into the eventual price hke. For the last few years, the Indian fuel prices have been adjusted daily in line with the benchmark international rate in the preceding 15 days. There was a freeze on this since November 4, 2021. However, with the end of electoral process, the ruling dispensation has no obligation to continue bearing losses anymore.
