Although the impact of the Iran-US conflict is not yet directly visible on the common Indian petrol and diesel consumer, the financial health of oil companies has deteriorated significantly. Crude oil prices in the global market have crossed $100 per barrel. Due to this conflict in many countries around the world, the prices of petrol and diesel have doubled, while in India there has been no increase in the prices. According to the rates released at 6:00 am on April 3, the retail price of regular petrol at Indian Oil pumps in Delhi is ₹94.77 per litre, while diesel is priced at ₹87.67 per litre. Whereas, the price of XP95 petrol is ₹ 101.89 per liter and the price of XG diesel is ₹ 91.49 per liter.
How is this loss being compensated?
Many countries around the world have seen a huge increase in the prices of petrol and diesel. Despite this, India is enjoying a breather for now—a situation that has become a problem for oil marketing companies (OMCs). According to Sujata Sharma, Joint Secretary, Petroleum Ministry, companies are currently incurring a loss of about ₹24 per liter on the sale of petrol and about ₹104 per liter on the sale of diesel. This difference is called “under-recovery”; This is a shortfall that OMCs are currently filling with their own profits.
Why has the government not increased the prices?
The government had already cut excise duties on petrol and diesel to provide relief to consumers. Moreover, oil companies have been asked to bear the burden of keeping prices stable. However, Brent crude prices—which were at $65 a barrel before the conflict began—are now trading above the $100 level, causing production costs to skyrocket.
No threat to supply
It is a matter of relief that fuel supply remains completely normal across the country. According to the government, crude oil supply for the next 60 days has already been secured. The country’s refineries are operating at their full capacity, ensuring that there is no shortage of petrol and diesel, nor any shortage of by-products like sulphur. How much did petrol prices increase in different countries during the war?
Myanmar 100.0%
Philippines 71.6%
Malaysia 52.4%
Australia 46.5%
United Arab Emirates 40.8%
Cambodia 39.3%
Zimbabwe 39.1%
Laos 117.5%
Peru 45.8%
Guatemala 34.4%
Myanmar 119.9%
Laos 117.5%
Philippines 111.0%
Cambodia 92.0%
Vietnam 91.3%
United Arab Emirates 86.1%
Malaysia 84.6%
Lebanon 70.3%
Australia 64.1%