Petrol and diesel prices in several Indian cities were little changed on Friday, March 20, continuing the recent trend of stability in retail fuel rates even as global oil markets see volatility.
The conflict involving the United States, Israel and Iran has entered its third week with no clear signs of de-escalation. It began on February 28, when coordinated US-Israeli strikes targeted Iran, prompting Tehran to retaliate by attacking US military bases in the Middle East.
Global energy markets have recently been rocked by rising geopolitical tensions in the Middle East, pushing Brent crude to nearly $108 a barrel this week. The conflict has also led to a virtual halt to supplies through the Strait of Hormuz, a crucial passage for oil markets.
Fuel prices for the city on March 20
The following retail rates are currently active in major cities across India:
Who is responsible for fuel prices?
The three main OMCs responsible for fuel pricing and distribution in India are Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL).
To keep domestic fuel prices in line with international oil prices and exchange rates, Oil Marketing Companies (OMCs) revise petrol and diesel prices every day at 6 am.
Retail fuel prices in the country are affected by several factors, including the price of crude oil in international markets, the rupee to dollar exchange rate, and taxes imposed by the central and state governments.
What is behind the stable fuel prices in India?
While the surge in oil prices has led to higher fuel costs in most countries, the same trend has not been seen in India, where fuel prices have remained stable for weeks.
This happened because of a calibrated system of “buffers” where oil marketing companies and the government smooth out global volatility, which in turn protects consumers in the short term, but not without trade-offs, Mint said.
Simply put, when international oil prices rise sharply, OMCs like BPCL and OIL often absorb the increase rather than immediately passing on the price difference to consumers.
Meanwhile, in the United States, a gallon of regular gasoline, which averaged $2.94 in February, now costs $3.5, a 20% increase, according to AAA Fuel Prices, the American Automobile Association’s retail fuel price tracker.
