India's Crude Prices Plummet, But Pump Prices Remain Sticky
India's crude oil prices have plummeted by nearly 56% from their wartime peak of $157 per barrel to around $68.69 in early July, but pump prices for gasoline and diesel remain largely unchanged.
The Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) control over 90% of India's fuel stations and have yet to pass on the savings to consumers.
Nayara Energy, a private retailer, broke ranks by cutting prices by around 20 cents per gallon for gasoline and 12 cents for diesel across more than 7,000 stations on July 1.
The disparity between crude oil prices and pump prices is due to various factors such as refining costs, freight charges, central duties, state taxes, dealer commissions, currency movements, and retailer margins.
Analysts estimate that the three dominant state-run companies are pocketing around 41 cents per gallon on gasoline and 43 cents on diesel in marketing margins.
The Indian Oil Corporation reported a profit of over $1.18 billion for the January-to-March quarter despite high crude oil prices, while BPCL posted a loss of $410.5 million and HPCL lost $1.19 billion.