Fourth hike in two weeks: Petrol, diesel prices increased again amid growing inflation concerns- The Week

Petrol and diesel prices were increased again on Monday, marking the fourth hike in less than two weeks, as global crude oil prices continue to remain volatile amid the ongoing conflict in West Asia.

State-run oil marketing companies raised fuel prices by up to Rs 2.61-2.71 per litre across major cities, stoking concerns over inflationary pressures and higher transportation costs across the economy.

On May 15, oil companies had increased fuel prices by ₹3 per litre — the first major revision in nearly four years. This was followed by a 90 paise per litre increase on May 19 and 87-91 paise increase on May 23.

Following the latest hike, petrol prices in Delhi rose to Rs 102.12 from Rs 99.51 previously, while diesel rates were increased to Rs 95.20 per litre from Rs 92.49.

In Mumbai, petrol at PSU pumps now costs Rs 111.21 per litre and diesel Rs 97.83, while prices in Kolkata rose to Rs 113.51 and Rs 99.82, respectively. In Chennai, petrol is priced at Rs 107.77 and diesel at Rs 99.55.

The conflict in West Asia has driven international crude oil prices sharply higher, with prices rising by more than 50 per cent in recent months. India’s crude oil import basket averaged around USD 69 per barrel in February, before the conflict began. In the months that followed, prices surged to an average of USD 113–114 per barrel.

Despite the steep rise in global crude prices, state-owned oil companies had kept retail fuel prices unchanged for nearly 11 weeks. However, reports suggest the companies eventually passed on part of the increased burden to consumers after prolonged losses made continued price stability financially unsustainable.

Bharat Petroleum (BPCL) had said last week that it continued to incur a revenue loss of 25 to 30 rupees per litre on diesel and 10 to 14 rupees per litre on petrol despite the higher prices.

BPCL, Indian Oil Corp and Hindustan Petroleum together control more than 90 per cent of a network of 103,000 fuel stations.

Former Marketing Director, BPCL, Sukhmal Kumar Jain said public sector oil companies had been under severe financial pressure due to rising crude prices and a weakening rupee.

“The public sector oil companies are still in heavy under-recoveries,” Jain told ANI, adding that crude prices had risen from around USD 65-70 per barrel to USD 110-115 per barrel during the conflict period.

ONGC Director (Exploration) Sushma Rawat said crude oil prices have remained highly volatile amid uncertainty over the conflict.

“The government has given relief to the people for 76 days, during which the price has not increased. The price has increased, because the OMCs were taking a hit of almost Rs 1,000 crore a day. How long do you sustain that?” she asked.