Oil marketing companies have been under pressure from rising brent crude prices amid the ongoing US-Iran conflict, and the absence of any fuel price hikes, until very recently. After the elections, it was expected that petrol, diesel prices will be hikedto recover at least some losses incurred by the state run OMCs, especially as brent crude has seen an extraordinary rally of more than 50% since the US and Israel launched strikes on Iran at the end of February.
Petrol and diesel prices were raised by 90 paise per litre on Tuesday, marking the second increase in fuel rates in less than a week. (check table below) The latest hike follows a sharp Rs 3 per litre increase implemented last Friday.
In Delhi, petrol is now priced at Rs 98.64 per litre, up by 87 paise, while diesel costs Rs 91.58 per litre after a hike of 91 paise. Mumbai saw petrol prices rise by 91 paise to Rs 107.59 per litre, with diesel up 94 paise at Rs 94.08 per litre.
Last week, 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.
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| City | Petrol (Rs/Litre) | Diesel (Rs/Litre) |
|---|---|---|
| Delhi | 98.64 | 91.58 |
| Mumbai | 107.59 | 94.08 |
| Kolkata | 109.70 | 96.07 |
| Chennai | 104.46 | 96.11 |
| Chandigarh | 98.10 | 86.09 |
| Hyderabad | 111.88 | 99.95 |
| Jaipur | 109.32 | 94.50 |
| Bengaluru | 107.12 | 95.04 |
| Lucknow | 98.40 | 91.73 |
Global Oil Prices
Oil prices declined after US President Donald Trump said he had called off a planned military strike on Iran, raising hopes that renewed negotiations could ease tensions in the Middle East and eventually restore disrupted crude flows.
Brent crude fell below $110 a barrel after gaining 2.6% in the previous session, while West Texas Intermediate for July traded below $103. The pullback came after Trump said leaders from Saudi Arabia, Qatar and the United Arab Emirates urged him to suspend an attack that had been scheduled for Tuesday.
In a social media post, Trump said the Gulf leaders requested that Washington “hold off” because “serious negotiations are now taking place.”
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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