Oil shock: Petrol crosses Rs 102
Finance Minister warns that rising fuel pressures could challenge economic stability
Petrol and diesel prices were hiked for the fourth time in 11 days amid the ongoing West Asia crisis. Petrol and diesel prices were raised by Rs 2.61-2.71 per litre on Monday, marking the fourth increase in less than two weeks as State-run Oil Marketing Companies (OMCs) retailers continued to pass on rising international oil prices to consumers. With this revision, petrol will now cost Rs 102.12 per litre in Delhi. Similarly, diesel will now cost Rs 95.20 per litre from 92.49 in the national Capital.
The latest increase in fuel prices is expected to add to the financial burden on commuters, transport operators and businesses across sectors. Notably, crude oil prices fell more than 4 per cent in futures trade on Monday amid growing optimism over a possible breakthrough between the US and Iran that could pave the way for reopening the Strait of Hormuz. The repeated hikes come against the backdrop of elevated global crude oil prices and a weakening rupee, both of which have raised import costs for oil marketing companies.
Petrol and diesel prices were increased on May 15 by Rs 3 per litre each, and on May 19 by 90 paise a litre. This was followed by an 87-paise per litre increase in petrol and a 91-paise hike in diesel rates on May 23. After Monday’s increase, petrol at State-run OMC pumps in Mumbai now costs Rs 111.21 per litre and diesel Rs 97.83, while prices in Kolkata rose to Rs 113.51 and Rs 99.82, respectively. In Chennai, petrol is priced at Rs 107.77 and diesel at Rs 99.55. Prices vary across States due to local taxes.
As India imports nearly 85-90 per cent of its crude oil requirements, it has been among the worst affected by the surge in crude oil prices. State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) together control 90 per cent of India’s fuel market.
According to Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, the four rounds of petrol and diesel price hike, totalling about Rs 7.5 per litre, have trimmed the losses for State-run OMCs to close to Rs 600 crore per day. The losses on sale of petrol, diesel and domestic cooking gas LPG were about Rs 1,000 crore per day before the start of the May 15 cycle of price revision.
The May 15 increase came after the ruling Bharatiya Janata Party (BJP) expanded its electoral footprint by winning three of five state and UT elections, including West Bengal.
