Petrol and diesel prices were hiked for the ninth time on Thursday in the last 10 days by 80 paise a litre.This fresh round of hike takes the overall increase to Rs 6.40 per litre on petrol and diesel.
In a report on March 24, Moody’s Investors Service said that fuel retailers IOC, BPCL and HPCL have together lost around $2.25 billion (Rs 19,000 crore) in revenue in March by keeping petrol and diesel prices unchanged despite a sharp rise in crude oil prices.
137-day freeze on petrol & diesel rates ended on March 21
The first increase in petrol and diesel prices this year, announced on March 22 was the first hike in 137 days. From November 3, 2021 until March 22, there had been a freeze on fuel prices due to the central government's excise duty cut of Rs 5 a litre on petrol and Rs 10 a litre on diesel and many states also lowering state tax.
Though these measures both by the centre and the state provided relief to customers against the soaring international crude oil prices, it was widely anticipated that there would be a revision in fuel prices after the results for the recent state assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur were out on March 10.
So, the current hike does not come as a surprise.
Increase also in CNG, LPG, Bulk diesel & PNG prices
Much earlier this month, on March 8, CNG price in the national capital and adjoining cities was hiked by Rs 0.50 per kg. CNG price in NCT of Delhi increased to Rs 57.51 per kg from Rs 56.51 per kg, according to the information posted on the website of Indraprastha Gas Ltd, the firm which retails CNG and piped cooking gas in the national capital.
On the first day of the hike (March 22) in petrol and diesel prices, domestic cooking gas prices were raised by Rs 50 per cylinder. And, couple of days prior to this hike, on March 20, OMCs increased the price of bulk diesel by Rs 25 per litre.
After LPG, PNG prices were up by Re 1 per unit in Delhi-NCR. Indraprastha Gas Ltd on March 23 raised PNG prices in the national capital and adjoining cities by Re 1 to pass on the increase in “input” costs. After the hike, PNG rose to Rs 36.61 per unit (SCM, or standard cubic metre) in Delhi.
Increase in crude oil prices likely to keep retail fuel prices high
Supply crunch after sanctions on Russia, dwindling oil stockpiles, and worries about a surge of COVID-19 in China hitting demand, drove the oil rally over the last four weeks.
The oil marketing companies (OMCs) have now started to increase retail fuel prices after four months as international crude oil prices have soared. JP Morgan earlier in its report said for OMCs to revert to normalised marketing margins, retail prices need to increase by Rs 9 a litre or 10 per cent. And, there was a report that in view of the geopolitical crisis, India's domestic prices of petrol and diesel would go up by Rs 15-22 per litre. It was viewed that an excise duty cut may dampen the impact on petrol and diesel prices, but only to an extent.
Hostilities between Russia and Ukraine, along with sustained demand, is expected to keep global crude oil prices high for some more time. This is likely to have further impact on India as it imports more than 80 percent of oil requirement.
The global markets are impacted as a result of sanctions on Russia, the world's second-largest crude exporter.Also Read: Oil to stay above $100 till Russia-Ukraine ceasefire, war premium on crude 30%: KPMG