Will petrol, diesel rates hit new highs in India? Here are tell-tale signs

Petrol and diesel rates were hiked once again on Wednesday, the second consecutive upward movement, across the country. Fuel rates had remained unchanged for over four months and up until Tuesday when rates were hiked by 80 paise per litre and then again by the same amount on Wednesday. The surge in global crude oil prices in the aftermath of Russia invading Ukraine has led to fuel prices climbing in most parts of the world.

A litre of petrol in Delhi is now at ₹97.01 while a litre of fiesel is at ₹88.27. In Mumbai, the two fuels are at ₹111.67 and ₹95.85. In Kolkata, a litre of petrol is at ₹106.34 while diesel is at ₹91.42. In Chennai, the rates are ₹102.91 and ₹92.95, respectively.

While many predicted petrol and diesel prices to shoot up immediately after the announcement of results to elections in four states on March 10, the upward trajectory has only now started. It is reported that oil marketing companies are still losing ₹18 to ₹19 on each litre of fuel sold at current rates because of the high crude prices in the global market. Oil prices are at around $111 a barrel, up from around $77 a barrel at the start of the year. Earlier this month, this figure had even touched a high of $135. Supply is a major concern with many western countries now divided on whether to impose sanctions on Russian oil. The Russian Deputy Prime Minister had previously said that any embargo would result in crude prices in the international market reaching $300 a barrel. “It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market. The surge in prices would be unpredictable. It would be $300 per barrel if not more," Alexander Novak had said. This, if it does take place, would have a massive impact on the fuel import bill on countries like India which are dependent on foreign countries for its oil requirements. (Read more here)

Hope on the horizon

There are talks that India could buy Russian oil at bargain prices in the coming times. According to a recent Bloomberg report, Russia's Urals crude is being purchased by Indian oil refiners at heavily discounted rates. And while Russia hasn't really been a major oil supplier to India in the past - oil from the country accounted for only two per cent of India's overall imports in 2021, the situation at present is vastly different. Oil Minister Hardeep Singh Puri had recently informed that India is keeping all her options open.

While West Asian countries remain the major suppliers of oil to India, upping the import from Russia at discounted rates could help keep petrol and diesel prices in India in check. These rates are already at record high levels as prices had never touched three-figure mark in the history of the country. But a series of central and state taxes and levies also contribute to the final price charged to the end customer.