Petrol and diesel prices in major Indian cities remained largely unchanged on Monday (March 23), despite disruptions to the global oil market due to conflict in the Middle East.
Although international oil markets have seen significant volatility since the launch of Operation Epic Fury and the subsequent shutdown of maritime traffic through the Strait of Hormuz, prices of petrol and diesel for ordinary customers have remained stable in India.
The Middle East conflict, now in its fourth week, erupted on February 28 after the US and Israel launched joint strikes against Iran, prompting Tehran to retaliate and plunging the region into conflict.
Since then, the Middle East has experienced chaos, with the Persian Gulf countries routinely intercepting missiles and drones launched by Tehran.
The Strait of Hormuz, a key waterway for global energy trade, has also seen an effective shutdown of maritime traffic, with Iran threatening strikes against tankers passing through.
As a result, oil prices rose globally, with Brent rising from around $70 at the end of February to $107.11 on Monday.
Industrial diesel, premium gasoline have become more expensive
With rising international oil prices piling pressure on margins, India’s state-owned oil marketing companies (OMCs) hiked the price of industrial diesel and premium petrol on Friday.
Industrial diesel, which is sold in bulk to commercial facilities, saw a rise in prices ₹21.92 liters – a substantial increase of 25%, while the price of premium petrol increased by ₹2 liters.
Regular prices of gasoline and diesel
However, the prices of regular petrol and diesel, which make up the bulk of the day’s sales at the pumps, remained unchanged.
India’s three major OMCs – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) – revise prices every day at 6 am to ensure rates are in line with international oil prices and exchange rate movements.
Below are the petrol and diesel prices in major Indian cities on Monday, March 23.
What Affects Petrol and Diesel Prices in India?
There are countless factors that affect petrol and diesel prices in India, the most significant of which is the price of crude oil in the global markets.
The rupee-to-dollar exchange rate also plays a key role in determining the price of petrol and diesel, given that India imports a large portion of its oil needs. Simply put, a weaker rupee can increase the cost of imported oil, thereby increasing domestic fuel prices, or vice versa.
Another factor is taxes imposed by the Center and state governments, which form a major component of petrol and diesel prices and are responsible for fuel price fluctuations between states.
Final prices of petrol and diesel in India are also influenced by transportation costs and supply and demand dynamics.
