India's Fuel Prices Adjusted as Global Oil Costs Increase

Nayara Energy Raises Petrol and Diesel Prices by Rs 5, Rs 3 Respectively​

New Delhi, March 26 – Nayara Energy, India’s largest private fuel retailer, announced a price increase of Rs 5 per litre for petrol and Rs 3 per litre for diesel on Thursday, citing the recent surge in global oil prices following the conflict in the Middle East. The move reflects mounting pressure on private fuel marketing companies as retail prices have remained frozen despite a near 50 per cent rise in international crude costs since February 28, when the United States and Israel launched military strikes against Iran.

Private Retailers Respond to Global Oil Price Surge​

Fuel marketing companies in India have faced significant challenges as petrol and diesel prices have remained stagnant. Nayara Energy, which operates 6,967 of India’s 102,755 petrol pumps, has decided to pass on a portion of these increased input costs to consumers. A company spokesperson declined to comment on the matter.
Jio-bp, the fuel retailing joint venture of Reliance Industries and BP Plc, which controls 2,185 outlets, has so far refrained from raising prices despite incurring substantial losses. Meanwhile, state-owned fuel retailers – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) – which control approximately 90 per cent of the market, continue to maintain prices at the current levels.

State-Specific Price Increases Vary​

Sources indicate that the actual price increase experienced by consumers varies across states, influenced by local taxes such as Value Added Tax (VAT). In some regions, the increase for petrol has reached as high as Rs 5.30 per litre. Private fuel retailers do not receive government compensation to offset losses incurred by absorbing price increases, unlike state-owned firms which are supported for acting as “good corporate citizens.” Mounting losses have left private retailers with limited options but to adjust retail prices.
Price Adjustments in Delhi
The following price adjustments have been implemented in Delhi:
International oil prices touched USD 119 per barrel earlier this month, driven by concerns over the Iran situation, before stabilizing around USD 100 a barrel.

Background: Global Oil Market Volatility​

India imports approximately 88 per cent of its crude oil needs and roughly half of its natural gas requirements, primarily through the Strait of Hormuz. Following the US and Israeli attacks on Iranian government, military, and nuclear facilities, Iran warned against shipping through the strait, and insurers withdrew coverage, effectively halting tanker movements. Oil prices reached USD 119 per barrel in June 2022 following Russia’s invasion of Ukraine. In FY24, the three state-owned fuel retailers reported a combined profit of Rs 81,000 crore. This year, the companies have posted a profit of Rs 23,743 crore in the December quarter alone. The government maintains that petrol and diesel prices are independently determined by oil marketing companies as deregulated commodities.