Petrol and diesel rates could rise in near future. Here’s why

Petrol and diesel prices in India may rise soon, as global crude oil costs have surged sharply from last year's levels. Crude oil, which was around $70 per barrel last year, has averaged over $114 per barrel this month, a jump of more than 60% that puts heavy pressure on fuel pricing in India. India imports roughly 85% of its crude oil needs, so global price swings feed directly into domestic fuel costs. Indian state-run oil companies, which sell petrol and diesel, have been absorbing losses rather than passing the full cost to consumers, but that gap is becoming harder to sustain. When oil marketing companies sell fuel below their purchase cost, they run into losses that eventually force a price revision or require government support. The longer crude stays elevated, the stronger the case for a retail price hike becomes. Watch for any official signal from the government or oil ministry on a revision in the administered fuel price. A hike would push up transport and logistics costs across the economy, feeding into broader consumer price inflation.