July has started off on a decent note with geopolitical tensions between the US and Iran easing substantially, crude prices back to pre-war levels, and restrictions on sale of petrol and diesel to commercial players being 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 Friday, July 3.
Nayara Energy cut petrol prices by Rs 5 per litre and diesel by Rs 3 a litre across its nationwide network on Wednesday July 1. However, Oil Minister Hardeep Singh Puri has said, "the question of bringing fuel prices down is not legitimate at this point in time." He said that petrol prices have risen only 5.58% over the past four years, while diesel prices have increased 6.23% during the same period.
Puri said state-run oil marketing companies (OMCs) are still dealing with cumulative under-recoveries of around Rs 2.18 lakh crore and continue to hold inventories procured when crude prices were significantly higher.
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.
In Delhi, petrol is priced at Rs 102.12 per litre, while diesel costs Rs 95.20 per litre on July 3.
Petrol prices on July 3
- 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 3
- 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 lower on Friday as crude flows through the Strait of Hormuz continued to recover, easing concerns over supply disruptions while investors looked at ongoing negotiations between the US and Iran aimed at securing a longer-term peace agreement.
Brent crude traded above $71 a barrel, while West Texas Intermediate (WTI) hovered near $68, with both benchmarks on track to post a fourth consecutive weekly decline. If realised, it would mark Brent's longest weekly losing streak since August 2024.
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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