It's July 1, a new month, geopolitical tensions between the US and Iran have eased substantially, crude prices are almost back to pre-war levels, and restrictions on sale of petrol and diesel to commercial players have been lifted.
With the four-month US-Iran war, that threatened to resume the past weekend, coming to a potential end, all eyes are on whether the retail fuel prices will see a cut. However, the prices of petrol and diesel have remain unchanged on Wednesday, July 1.
Ever since the US-Iran War began, fuel prices have been hiked for four times, with the latest increase of Rs 2.6 and Rs 2.7 per litre respectively announced last month. So far, prices have increased by Rs 7.5-8 since the start of the war.
Oil manufacturing companies' (OMCs) under-recoveries have also seen a notable reduction, but brokerages expect retail fuel prices to remain steady to allow OMCs to earn supernormal margins, just like in 2022.
In Delhi, petrol is priced at Rs 102.12 per litre, while diesel costs Rs 95.20 per litre on July 1.
Petrol prices on July 1
- Petrol price in Delhi : Rs 102.12/litre
- Petrol price in Kolkata : Rs 113.51/litre
- Petrol price in Mumbai : Rs 111.21/litre
- Petrol price in Chennai : Rs 108.01/litre
- Petrol price in Hyderabad: Rs 115.73/litre
- Petrol price in Bengaluru: Rs 110.89/litre
Diesel prices on July 1
- Diesel price in Delhi : Rs 95.20/litre
- Diesel price in Kolkata : Rs 99.82/litre
- Diesel price in Mumbai : Rs 97.83litre
- Diesel price in Chennai: Rs 99.66/litre
- Diesel price in Hyderabad : 103.82/litre
- Diesel price in Bengaluru: 98.80/litre
Global Crude Prices
Oil prices edged higher on Wednesday as investors tracked progress in US-Iran negotiations while monitoring the recovery of oil shipments through the Strait of Hormuz, easing concerns over prolonged supply disruptions.
Brent traded above $73 a barrel, while West Texas Intermediate (WTI) hovered near $70, after crude posted its steepest quarterly decline since the pandemic.
The recent sell-off has been driven by expectations that oil flows through the Strait of Hormuz — a route that carries about one-fifth of global crude and liquefied natural gas shipments — will continue to normalise.
Sentiment improved after senior US officials said indirect discussions between Washington and Tehran in Doha had been constructive. US negotiators Jared Kushner and Steve Witkoff held talks in Qatar, with technical discussions between the two sides continuing as efforts to secure a more durable ceasefire gather pace.
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 value added tax or VAT significantly affect the final retail price of petrol and diesel. This is why fuel rates differ across all cities.
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