Fuel prices across major Indian cities remained largely unchanged on May 3, even as global crude oil markets continue to witness sharp volatility amid
geopolitical tensions. Since the escalation of conflict in West Asia on February 28, crude oil prices have surged past $120 per barrel, the highest level seen in four years. This marks a steep jump from around USD 73 per barrel before the crisis began. The spike has significantly increased India’s import burden, with higher petroleum and fertiliser costs posing risks to both government finances and retail inflation. India’s Chief Economic Advisor, V Anantha Nageswaran, recently cautioned that the country could face a possible inflation surge in the coming months. He highlighted that a weaker-than-expected monsoon, coupled with rising energy costs being passed on to consumers, may intensify pressure on household budgets.
Multiple Risks Emerging
According to Nageswaran, the ongoing West Asia crisis is affecting India through four major channels, price and supply disruptions, trade disturbances, persistently high logistics costs, and a potential decline in remittances. He emphasised that the situation is complex and unlikely to ease quickly.
He further pointed out that India relies on imports for nearly 60 per cent of its LPG consumption, with about 90 per cent of these supplies routed through the Strait of Hormuz, which is currently impacted. This, he noted, makes the situation particularly challenging.
The government, meanwhile, is attempting to strike a balance between protecting consumers and managing fiscal pressure. Measures include partial pass-through of increased costs through commercial LPG pricing and export duties on diesel and aviation turbine fuel, while reducing excise duties on petrol and diesel to ease the burden on the public.
Nageswaran described this approach as a careful balancing act between fiscal policy, inflation management, households, and oil marketing companies.
OMCs Under Pressure
A senior official from the oil ministry recently indicated that state-run oil marketing companies are incurring losses of around Rs 20 per litre on petrol and nearly Rs 100 per litre on diesel. This comes as retail fuel prices have remained largely unchanged for almost four years, despite rising global crude rates.It is worth noting that these companies had recorded strong profits in recent years when global oil prices were relatively stable, even as retail prices remained steady.
Fuel Prices in Key Cities (May 3)
Petrol prices across major cities are as follows:
- New Delhi: Rs 94.77 (no change)
- Mumbai: Rs 103.54 (no change)
- Kolkata: Rs 105.41 (no change)
- Chennai: Rs 100.80 (down Rs 0.04)
- Bengaluru: Rs 102.96 (no change)
- Gurugram: Rs 95.43 (down Rs 0.22)
- Noida: Rs 94.85 (down Rs 0.05)
- Bhubaneswar: Rs 100.94 (down Rs 0.09)
- Chandigarh: Rs 94.30 (no change)
- Hyderabad: Rs 107.50 (up Rs 0.04)
- Jaipur: Rs 105.03 (down Rs 0.37)
- Lucknow: Rs 94.69 (down Rs 0.04)
- Patna: Rs 105.74 (up Rs 0.32)
- Thiruvananthapuram: Rs 107.40 (down Rs 0.08)
Diesel prices across cities:
- New Delhi: Rs 87.67 (no change)
- Mumbai: Rs 90.03 (no change)
- Kolkata: Rs 92.02 (no change)
- Chennai: Rs 92.39 (no change)
- Bengaluru: Rs 90.99 (no change)
- Gurugram: Rs 87.89 (down Rs 0.21)
- Noida: Rs 87.98 (down Rs 0.03)
- Bhubaneswar: Rs 92.52 (down Rs 0.08)
- Chandigarh: Rs 82.45 (no change)
- Hyderabad: Rs 95.70 (no change)
- Jaipur: Rs 89.98 (down Rs 0.23)
- Lucknow: Rs 87.81 (no change)
- Patna: Rs 91.97 (up Rs 0.30)
- Thiruvananthapuram: Rs 96.28 (down Rs 0.20)
