Diesel Rates Hold Firm Despite Global Crude Swings as US-Iran Talks Boost Market Sentiment

Petrol and diesel prices across several major Indian cities remained unchanged on April 15. This stability came despite volatile global crude prices, which showed signs of stabilizing after a sharp global selloff. The quiet period is underpinned by renewed diplomatic efforts between the US and Iran, lending a note of cautious optimism to global markets.

In Delhi, petrol continues to sell at ₹94.77 per litre, with diesel priced at ₹87.67 per litre. Meanwhile, Mumbai recorded higher retail rates, with petrol selling at ₹103.54 per litre and diesel at ₹90.03 per litre.

Retail Fuel Rates Across Major Indian Cities​

The pricing structure shows significant regional variations. Kolkata reports petrol at ₹105.45 per litre and diesel at ₹92.02 per litre. Chennai maintains rates of ₹100.84 for petrol and ₹92.39 for diesel. Other major hubs include Ahmedabad (Petrol ₹94.49, Diesel ₹90.16), Hyderabad (Petrol ₹107.46, Diesel ₹95.7), and Bengaluru (Petrol ₹102.96, Diesel ₹90.99).

The government's cautious approach to fuel pricing is evident, particularly with state elections approaching. Sources noted that state-run oil marketing companies will pay refineries a discounted price for various fuels. This measure aims to limit mounting losses resulting from a self-imposed freeze on retail fuel prices.

Expert Analysis on Industry Losses and Price Control​

Analysts have highlighted the significant financial pressure on oil marketing companies. A report from Macquarie Group estimated that at a spot petrol-diesel pricing of $135-165 per barrel, India’s oil marketing companies incur estimated losses of ₹18 and ₹35 per litre respectively.

This research also noted that every $10 per barrel increase in crude adds roughly ₹6 per litre to marketing losses. Given these losses, the brokerage flagged a high likelihood of retail fuel price hikes following elections in key states such as West Bengal and Tamil Nadu at the end of the month.

Global Crude Dynamics and Market Support​

On the global front, Brent crude hovered above $94 a barrel after declining nearly 5% in the previous session. The US benchmark WTI traded close to $90. This upward recovery in global rates is linked to anticipated negotiations between the US and Iran. The aim of these talks is to extend a ceasefire that is scheduled to lapse next week.

State-run entities like Indian Oil Corporation Ltd and Bharat Petroleum Corporation Ltd made separate changes to industrial products. Specifically, they hiked the price of industrial diesel by ₹28.22 per litre, representing a 25% increase, bringing the rate to ₹137.81 per litre.

Key Factors Driving Fuel Pricing Decisions​

The final retail price of petrol and diesel is determined by a mix of complex economic factors. Foremost among these is global crude oil pricing, as crude remains the primary raw material for both fuels.

Secondly, the rupee-dollar exchange rate plays a critical role, since India imports a large portion of its crude requirements. Additionally, central excise duty and state-level VAT significantly affect the final consumer price, explaining the rate disparities observed across different cities.

Regarding other fuels, domestic cooking gas LPG rates, last hiked by ₹60 per 14.2-kg cylinder on March 7, remain unchanged, costing ₹913 per 14.2-kg cylinder in Delhi. Conversely, commercial LPG rates were recently hiked due to global crude oil surges linked to Middle East conflicts.