Indian fuel retailers raise fuel prices again amid Iran war impact

NEW DELHI: State-run fuel retailers in India increased petrol and diesel prices by less than one Indian rupee per litre on Tuesday, marking the second rise within a week as they seek to recover losses linked to higher crude prices caused by the Iran war.

After the latest increase of about 0.9 Indian rupees per litre, consumers in New Delhi will pay 98.64 Indian rupees for a litre of petrol and 91.58 Indian rupees for a litre of diesel, dealers said. Fuel prices differ across India because of regional taxes.

Although petrol and diesel prices in India are officially deregulated, the government retains substantial influence because it is the majority shareholder in the main retail companies.

Losses mount for state retailers

Sujata Sharma, a joint secretary in India’s oil ministry, said on Monday that state fuel retailers were losing 7.5 billion Indian rupees each day. She also said the government had no plan to extend financial support to the companies.

According to refiner sources cited in the report, further price increases will be needed for the companies to make up for their losses. The fuel retailers did not respond to Reuters emails seeking comment.

India is the world’s third-largest oil importer and consumer. It was also among the last major economies to raise retail fuel prices after the US-Israel war on Iran pushed up prices internationally.

Second increase in a week

The latest revision follows a 3 Indian rupees per litre increase in petrol and diesel prices on Friday, which was the country’s first fuel price rise in four years. Dealers and analysts said they expected the increases to be phased in, similar to the pattern seen in April 2022 during the Covid pandemic.

State-run Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum together control more than 90pc of India’s network of 103,000 fuel stations, and they generally move prices in tandem.

Political criticism and conservation push

Opposition parties said Prime Minister Narendra Modi’s government had delayed fuel price increases in an effort to secure votes in recent state elections. Modi’s Bharatiya Janata Party won two of the four states, extending its political reach.

The report also said Modi has urged people to reduce travel in order to save fuel and to curb gold purchases.

The latest increase underscores the pressure on Indian fuel retailers as global energy markets remain affected by the conflict involving Iran. With losses continuing and no government financial assistance planned, the prospect of additional price adjustments remains in focus.