Indian energy companies raise petrol and diesel prices for the fourth time in two weeks
India’s state owned oil marketing companies raised prices at the pump for the fourth time in two weeks on Monday, fueling concerns about the impact of the Middle East conflict on the country’s economy.
The first fuel price hike took place in mid-May, when refiners, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum, increased retail prices by over 3% – the first hike in four years. According to Reuters, the cumulative increase since the beginning of the month now stands at 8.6% for diesel and 7.8% for gasoline.
The latest hike comes despite global crude oil prices slipping below the psychological $100 per barrel mark amid easing concerns around disruption in the Strait of Hormuz. Analysts say Indian state-run firms remain under pressure because retail fuel prices were frozen for four years even as global crude soared.
Petroleum Minister Hardeep Singh Puri said earlier this month that while India has sufficient energy reserves to manage short term disruptions, state run refiners were incurring daily losses, and further hikes would be likely if disruptions linked to the Iran war continue.
According to NDTV Profit, the four fuel price hikes carried out so far have only helped refiners recover around 44% of the losses they incurred during the crude spike period.
Speaking to the media on Monday, Petroleum Secretary Sujata Sharma noted that while the country’s energy imports have been affected by the ongoing Middle East crisis, “all efforts have been made to ensure the smooth supplies of petroleum products.”
Earlier this month, the Indian government called for fuel conservation efforts. Prime Minister Narendra Modi urged Indians to consider using public transport instead of personal vehicles and to shift to working from home, when possible. New Delhi has also been working on fiscal measures to shield its foreign exchange reserves from the impact of soaring oil prices linked to the Iran war.
As the world’s third-largest oil buyer, India relies on imports for around 85% of its oil needs, leaving it vulnerable to rising energy prices and disruptions in the supply chain through the Strait of Hormuz.
