Petrol, diesel see 4th consecutive hike; fuel prices up by Rs 3.20/ltr in last 5 days

On Saturday, oil marketing companies (OMCs) raised fuel prices for a fourth time by Rs 0.80 per litre in the last five days.

The price of petrol and diesel in Delhi reached Rs 98.61 per litre and Rs 89.87 per litre respectively today after being increased by Rs 0.80 per litre; in Mumbai, the petrol and diesel prices per litre were at Rs 113.35 per litre and Rs 97.55 per litre, with an increase of Rs O.84 and Rs 0.85 respectively today. Among metro cities, fuel prices are the highest in Mumbai.

There have been four increases of Rs 0.80 per litre since daily the price revisions restarted on March 22 after a four-and-half-month long hiatus. The hikes are the sharpest yet since 2017 when the government linked petrol prices with international markets, initiating daily price revisions.

These increases are the steepest single-day rise since the daily price revision was started in June 2017. In four increases, petrol and diesel prices have gone up by Rs 3.20 a litre. Global crude oil prices have rallied by $30-a-barrel since November 4— when daily revisions were suspended in India due to elections. The daily rate revisions were largely expected to begin



on March 10, after assembly election results, but were held off for some time, perhaps due to inflation concerns.

Crude oil now stands at $117-a-barrel compared to $82 on November 2 and OMCs seem to be passing off this increase to the consumers in stages.

According to Moody's Investors Services, state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) collectively lost around USD 2.25 billion (Rs 19,000 crore) in revenue during the election period by keeping petrol and diesel prices unchanged. According to Kotak Institutional Equities, oil companies "would need to boost diesel prices by Rs 13.1-24.9 per litre and gasoline (petrol) prices by Rs 10.6-22.3 per litre at an underlying crude price of USD 100-120 per barrel."

According to CRISIL Research, a 100% pass-through of an average USD 100 per barrel crude oil will require a Rs 9-12 per litre increase in retail pricing, and a Rs 15-20 per litre hike if the average crude oil price goes to USD 110-120. Because India is 85 percent reliant on imports to meet its oil needs, retail rates fluctuate with the global market.