Petrol and diesel prices in India are unlikely to be raised immediately despite global crude oil prices crossing $110 per barrel amid escalating tensions in the Middle East. The government currently expects state-run oil marketing companies (OMCs) to absorb the impact for now, keeping domestic fuel prices stable across the country.
Government Asks Oil Companies to Absorb Rising Crude Prices
Government sources said that oil marketing companies may have to accept lower profits as international crude prices surge. For the time being, retail petrol and diesel prices in India will remain unchanged despite the volatility in global energy markets.
West Texas Intermediate rose about 27 per cent to $116 per barrel, while Brent crude gained 28 per cent to $116. This marks the first time since 2022 that both global benchmarks crossed the $100 mark.
Why Petrol and Diesel Prices in India Remain Unchanged
The spike in crude oil prices followed escalating hostilities in the Middle East and supply disruptions at the strategically important Strait of Hormuz. Despite the rally in global oil prices, domestic fuel prices in India have remained stable nationwide.
Although India generally adjusts petrol and diesel prices in line with international crude movements, the government has occasionally asked oil companies to absorb fluctuations during periods of extreme volatility.
India Diversifies Oil Imports to Strengthen Energy Security
The improving energy stock situation has given the government greater confidence in managing fuel supplies. India has also taken steps to diversify its crude oil imports to reduce dependence on vulnerable routes.
“India has increased its crude oil imports from sources other than the Strait of Hormuz. Earlier, about 60 per cent of India’s crude oil imports came from sources outside the strategic shipping route, but that share has now increased to around 70 per cent,” according to cources.
“The first cargo has already started moving through the Strait of Hormuz — indicating that supply flows are stabilising,” they mentioned.
Global Energy Market Faces Uncertainty
Qatar’s energy minister Saad al-Kaabi had warned that war in the Middle East continuing for “few days” could cause Gulf exporters declaring force majeure, halting deliveries, pushing oil to $150 a barrel and natural gas to $40 per MMBtu within weeks.
US President Donald Trump has defended the spike in oil prices, saying higher oil prices were a temporary cost tied to confronting Iran’s nuclear threat.
