Petrol and diesel prices were little changed in India’s major cities, despite the global energy crisis triggered by the effective shutdown of trade through the key Strait of Hormuz.
Oil prices have risen dramatically since the US and Israel attacked Iran on February 28, with benchmark Brent crude up more than 50% in that period to touch $116 on Monday.
Although Iran has granted exemptions to some “friendly” countries – including India, China, Russia and Pakistan. among others — volatility remains in the international oil market, particularly given the uncertainty over the direction and duration of the ongoing war in the Middle East.
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Despite the war having passed the one-month mark, and despite Donald Trump’s repeated declarations of victory one way or another, the conflict in the Middle East seems far from over: over the weekend, Yemen’s Houthis joined the war, posing yet another potential threat to global trade. Further, despite Trump’s claims of productive talks, Tehran remains adamant, publicly denying talks with Washington.
On Tuesday, reports also indicated that Trump was considering ending the military campaign against Iran without reopening the Strait of Hormuz, and it remains to be seen how such a decision, if made, would affect oil markets.
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Consumption tax has decreased, industrial diesel has increased
In this context, the Indian government last week reduced the excise duty on petrol and diesel after increasing the price of industrial diesel and premium petrol.
Last week, the Center reduced excise duty on petrol by Rs ₹3 liter and made diesel completely tax-free in a bid to provide relief to state-owned oil marketing companies (OMCs) facing pressure on their margins due to rising global oil prices.
In early March, the government also increased the price of industrial diesel, which is sold in bulk to commercial facilities, by ₹21.92 litres, a significant increase of 25%. At the same time, the price of premium gasoline rose by ₹2 liters.
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Regular prices of gasoline and diesel
The OMCs revise the prices every morning at 6:00 AM, but despite the said changes, the prices of regular petrol and diesel, which make up the bulk of the day’s sales at the pumps, remain almost unchanged.
Below are the petrol and diesel prices in major Indian cities on Tuesday, March 31.
CityGasoline ( ₹ /L)Diesel ( ₹ /L)Delhi ₹94.77 ₹87.67 Bombay ₹103.54 ₹90.03 Calcutta ₹105.45 ₹92.02 Chennai ₹100.84 ₹92.39 Hyderabad ₹107.46 ₹95.70 Bengaluru ₹102.96 ₹90.99 Lucknow ₹94.69 ₹87.81 Ahmedabad ₹94.49 ₹90.17Read also | Pentagon denies report of move by broker Hegseth in defense fund ahead of Iran strike
Factors Affecting Petrol and Diesel Prices in India
Petrol and diesel prices in India are affected by many factors, the most significant of which is the price of crude oil in the international markets.
The rupee to dollar exchange rate also plays a vital 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 affected by supply and demand dynamics and logistics costs.
