Petrol and Diesel Prices Rise by Rs 3 Per Litre Amid Ongoing Oil Marketing Company Losses

Fuel Prices Hike Amid Ongoing Iran Conflict and Global Oil Market Concerns

Days after Prime Minister Narendra Modi urged citizens to cut fuel consumption and adopt energy-saving measures amid growing concerns over the ongoing Iran conflict and its impact on global oil markets, state-run oil marketing companies raised petrol and diesel prices by Rs 3 per litre each on Friday, passing on part of the sharp increase in global energy costs to consumers.

The revised rates came into effect immediately across the country. In Delhi, petrol prices rose by Rs 3.14 per litre to Rs 97.77, while diesel became costlier by Rs 3.11 per litre. This significant increase is a result of India's oil marketing companies facing mounting financial stress from keeping retail fuel prices unchanged despite elevated crude prices.

India's oil marketing companies continue to face significant financial challenges. Last week, Sujata Sharma, Joint Secretary in the Union Petroleum Ministry, revealed that the combined under-recovery on petrol, diesel, and LPG has reached nearly Rs 30,000 crore every month. The Centre had already cut excise duties on petrol and diesel, sacrificing nearly Rs 14,000 crore in monthly revenue, but under-recoveries continue to widen.

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The pressure on public sector fuel retailers is substantial, as they are buying crude oil at higher rates but are not selling at corresponding rates to protect their consumers, impacting their finances. Explaining this situation, Sharma noted that the Centre's efforts to reduce excise duties have not been enough to mitigate the financial stress faced by oil marketing companies.

The fuel price increase comes just days after Modi, in his appeal on Sunday amid the escalating West Asia crisis, asked citizens to reduce dependence on conventional fuels and conserve foreign exchange. In a symbolic move following his appeal, Modi also significantly reduced the size of his official convoy, with several BJP-led states and party leaders later adopting similar austerity measures.