Fuel prices rise again, petrol tops ₹99 per litre in Delhi

This is the fifth hike in prices in six days after daily price revision of retail fuels started on 22 March. Since then, petrol prices in Delhi have increased by ₹3.7 a litre, while that of diesel has increased by ₹3.75 per litre.

Revision of fuel prices was halted for over four months since November, although crude oil prices surged over $40 per barrel since. Given the large gap in crude oil prices and retail fuel rates, experts feel this price rise is here to stay.

A report by Moody’s Investor Services said that the state-owned refining and marketing companies together have lost around $2.25 billion ( ₹19,000 crore) in revenue on petrol and diesel sales.

“We estimate IOC’s revenue loss to be around $1 billion-$1.1 billion while that of BPCL and HPCL to be about $550-$650 million over the same period. This loss in revenue will add to the short-term borrowings, funded with working capital lines, of the refiners until such time that crude oil prices stay at elevated levels. Over time, the companies might be able to make up for some of these losses if oil prices come down,” it said.

On Friday, the May contract of Brent futures on the Intercontinental Exchange closed at $120.65, higher by 1.36% from its previous close. The May contract of West Texas Intermediate rose 1.39% to $113.90 per barrel.

Fuel prices have been largely on the upside since Russia invaded Ukraine on 24 February. On 7 March, Brent had touched $139.13 per barrel, the highest since 2008.

High crude oil prices play a major role in India’s economy as the country imports about 85% of its energy requirements. The Indian energy basket, comprising Oman, Dubai and Brent crude was last recorded at $117.71 per barrel on 24 March, according to data from the Petroleum Planning & Analysis Cell of the Ministry of Petroleum and Natural Gas.