With global oil prices holding their rally, and Brent trading near $106, everyone is bracing for a change in petrol and diesel prices soon.
Petroleum Minister Hardeep Singh Puri on Tuesday said public sector oil marketing companies may not be able to sustain daily losses of Rs 1,000 crore from selling petrol and diesel below market price. Even the RBI Governor said, “If this is to continue for longer period of time, it is just a matter of time before the government will pass on some of the price increases,” at a conference hosted by the Swiss National Bank and the International Monetary Fund in Switzerland on Tuesday.
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Do you know the cost that state-owned oil firms are incurring for insulating Indian consumers from the global energy shock? It's Rs 1,600-1,700 crore per day, over Rs 1 lakh crore in 10 weeks.
However, petrol and diesel prices remain largely unchanged on May 14. (check table below)
In the national capital, petrol is still selling at Rs 94.77 per litre, while diesel is priced at Rs 87.67 per litre. Rates are comparatively steeper in Mumbai, where petrol is being sold at Rs 103.50 per litre and diesel at about Rs 90.01 per litre.
| City | Petrol (Rs/Litre) | Diesel (Rs/Litre) |
|---|---|---|
| Delhi | 94.77 | 87.67 |
| Mumbai | 103.50 | 90.03 |
| Kolkata | 105.45 | 92.02 |
| Chennai | 100.80 | 92.81 |
| Ahmedabad | 94.49 | 90.16 |
| Hyderabad | 107.50 | 95.70 |
| Jaipur | 104.72 | 90.21 |
| Bengaluru | 102.96 | 90.99 |
| Lucknow | 95.39 | 87.81 |
Possible Scenario
Energy shocks triggered by the war between United States and Iran have slapped India's oil marketing companies with a potential loss of Rs 1.2 lakh crore in the first quarter of FY27. The loss far exceeds the street estimates of losses worth Rs 27,000 crore per month, translating to Rs 81,000 crore per quarter, considering crude remained at $120 per barrel level.
Notably, even as crude oil prices have only briefly stayed around or above the $120 per barrel mark, majorly staying below $115 per barrel, OMCs are still looking at a bigger loss than what was anticipated.
Currently, a domestic LPG cylinder costs somewhere around Rs 912. In order for the oil companies to sustain, the per cylinder price would need to be increased by a whopping 105% or Rs 956 to cost around Rs 1,868. Similarly, petrol prices might have to be raised by 29.5% or Rs 28 increase to somewhere around Rs 130 per litre (in Mumbai) or above, while diesel needs a hike of over 36% to levels of approximately Rs 122 per litre or more.
Global Oil Prices
.Oil prices steadied on Thursday as investors turned their attention to a high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing, while concerns over the Iran war continued to support crude prices. Brent crude traded below $106 a barrel after falling 2% in the previous session, while West Texas Intermediate hovered near $101.
The price of commercial LPG (19 kg) has been increased by Rs 993 (on average). Commercial LPG cylinder prices in Delhi are now at Rs 3,071.50 (from Rs 2,078.50 earlier). Similarly, commercial LPG cylinder prices in Mumbai have been raised from Rs 2,031 to Rs 3,024.
Significantly, the price of a 19-kg commercial LPG cylinder has been increased thrice since February 28 when the Iran war began. It was first increased by Rs 144 in March, followed by another hike of nearly Rs 200 on April 1.
What Drives Petrol and Diesel Prices?
Fuel prices in India depend on several factors, with global crude oil prices being the most significant as crude is the primary raw material used to produce petrol and diesel.
The rupee–dollar exchange rate also influences fuel prices since India imports a large portion of its crude oil requirements. Additionally, central excise duty and state-level VAT significantly affect the final retail price of petrol and diesel, which is why rates differ across cities.
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