Another blow… petrol-diesel will be expensive by 5 rupees? Experts express concern due to the loss of oil companies

Petrol-Diesel Price Hike: Petrol and diesel prices in India have been hiked four times in the past one month, in the wake of the conflict in Iran and tensions in West Asia. This hike has increased the prices of petrol and diesel to a total of Rs 7.5 per litre. This price hike, caused by tensions in the Middle East, has taken place after a long period of four years. But the situation is still not resolved. As the tension continues even today, there is a fear of petrol-diesel prices increasing again.

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Huge loss to oil companies

In all these circumstances, state-owned oil companies are facing a loss of around Rs 5.5 per liter on petrol and Rs 4.5 per liter on diesel. These companies are collectively incurring daily losses of over Rs 550 to 600 crores, a situation that cannot be sustained for long.

Will the price increase by another 5 rupees?

Oil companies will have to increase the retail price by another Rs 5 per liter to break even. This is the opinion of ‘ICRA’ (ICRA) and financial analysts. Analysts say the hike is necessary, but the government is currently restraining itself from allowing oil companies to pass on the entire hike to consumers to keep retail inflation under control. As a solution, the government has tried to shoulder some of this burden itself by reducing excise duty.

Crude oil prices

India imports about 85% of its crude oil requirement. Currently, Brent crude prices are between 92 and 95 dollars per barrel. This price level is affordable for Indian oil companies; Hence, there is no immediate need for them to raise retail rates. When the price of crude oil crosses the $100 per barrel mark and remains at that level for several weeks, the pressure to raise rates usually builds. There is no such critical situation at present.

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