Hormuz closed, crude oil becoming expensive, will the prices of diesel and petrol increase or not?

Iran, which is facing all-round attacks, has now bluntly said that the Strait of Hormuz is now closed and the ships passing through it will be burnt. Due to this decision of Iran and the uproar in Western Asia, the prices of crude oil have started increasing. It is being said that if the conflict continues, the price of crude oil may reach $ 100 per barrel in the coming days. In such a situation, there is also discussion on whether the prices of diesel and petrol will also increase in India? This situation is very worrying for India which is dependent on many other countries apart from Arab countries for its oil related needs.

After the attack by Israel and America on Iran, the prices of crude oil have increased by 9 to 10 percent. Now the international price of one barrel of crude oil is going to reach 80 dollars per barrel. The price of American crude oil was $ 67 per barrel on Friday but now it has become $ 72.79 per barrel. In such a situation, concern about oil prices has increased in many countries including India. The Indian government is also in talks with shipping companies, oil companies etc. for this.

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Why is India so worried?

88 percent of the oil required in India comes from other countries. By bringing crude oil, petroleum products like diesel and petrol are prepared in the refineries of India. Even today, most of the vehicles, factories and many big plants in India are dependent on petroleum products for their energy needs, hence the situation in Western Asia is troubling the business class of India.

Will diesel-petrol be expensive in India or not?

This is the biggest question because the common citizen uses diesel, petrol, CNG or PNG the most. According to a PTI report, due to the way oil prices are increasing, there is no possibility of any immediate change in the prices of diesel and petrol.

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According to PTI report, the government is giving oil selling companies an opportunity to increase margins at a time when international oil prices are low. In such a situation, when the prices of crude oil increase, these companies reduce their margins and this does not affect the customers. For example – understand that if companies are getting crude oil cheap i.e. for just Rs 10 and you are buying it for Rs 50, then the company’s margin is Rs 40. In this situation you will not get cheap oil but companies will earn profits. Now when oil becomes expensive i.e. suppose companies bought it at Rs 30, then companies will not increase the price of oil and will manage with low margins. The advantage of this will be that even in this situation, the customer will continue to get oil at the same price as he was getting earlier.

What is the situation now?

Let us tell you that from April 2022 till now, there has been no major change in the prices of diesel and petrol in India. During this period, government companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited suffered losses when crude oil became expensive. However, when crude oil became cheaper, these companies also earned good profits but there was no change in the price of oil available to the people.

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PTI has said in its report that the government wants to move forward on this policy so that the increase in oil prices does not affect the public. Especially at such a time, the government would not want to take such a risk when assembly elections are going to be held in five states and only one of these five states has a Bharatiya Janata Party (BJP) government. If oil prices increase, the opposition may get an easy issue at the time of elections.