Petrol and diesel prices increased by up to Rs. 3 per liter across India on Friday, marking the first major fuel price revision in nearly four years as global crude oil rates continue to rise amid tensions in West Asia.
Petrol in Delhi currently costs Rs. 97.77 per liter, while diesel costs Rs. 90.67 per liter. Fuel prices have been increased in major cities such as Mumbai, Chennai, and Kolkata following the oil marketing companies’ price revisions.
This hike has been made in light of the rising cost of international crude oil due to concerns about disruptions to oil flows through the Strait of Hormuz. India depends on foreign suppliers for almost 85 percent of its crude oil requirements.
Public-sector oil marketers, such as Indian Oil Corporation, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd, have maintained steady prices despite rising crude oil prices for a long time now.
According to industry analysts, these corporations have been shouldering some of their costs to prevent too many price changes in retail. The move to raise prices now seeks to minimize such losses due to high crude prices.
There were also speculations that there would be further hikes if geopolitical tensions persist and crude prices remain high.
The increase in fuel costs is likely to raise transportation and logistics costs due to higher diesel prices. Analysts had also cautioned that the increase would lead to the cost of necessities rising in the coming days.
The continued rise in fuel prices may also impact cab fares, delivery service fees, and freight rates. In some cities, a 2/kg increase in CNG prices was observed soon after the fuel price increase.
Also Read: $174.9B Import Bill Under Threat, Modi Urges India to Slash Petrol, Diesel Use
The opposition criticized the Center over the increase in fuel charges, saying it will add to the commoners’ burden at a time of inflation anxiety.
Economists have suggested that local fuel prices will be largely determined by the trend in international crude prices and the situation prevailing in West Asia.