India's Fuel Prices Remain Stable Amid Global Tensions and Rising Crude Oil Costs
The global energy supply is under threat due to tensions in West Asia and attacks on key oil facilities in Saudi Arabia, potentially leading to higher prices. Despite this risk, petrol and diesel prices across major Indian cities remain relatively stable, with the national average price of petrol standing at ₹111.21 per litre and diesel at ₹97.83 per litre as of September 26.
India's state-run oil marketing companies are facing a severe financial squeeze due to rapidly rising global crude prices, losing approximately ₹530 crore every day as pump prices remain unchanged. The government has no proposal to increase petrol and diesel rates despite the volatility in global crude oil prices.
The widening gap between increasing import costs and stagnant domestic retail rates is eroding retail margins for state refiners, who are absorbing the full impact of the price surge. Crude prices are expected to remain high in the run-up to the US midterm elections in November, adding uncertainty to India's oil import bill and domestic fuel pricing.
The rupee-dollar exchange rate is a key variable, as India relies heavily on imported crude. When the rupee weakens against the dollar, the cost of procuring crude rises, potentially leading to higher retail fuel prices for consumers.