Oil companies will now be recouping their losses as the 137-day respite ends on March 22.
Petrol and Diesel Prices hiked continuously for the second day in a row this Wednesday. The hike was seen to be 80 paise a litre in both.
State Fuel Retailers have notified prices of petrol to be Rs. 97.01 per litre in Delhi against Rs. 96.21 per litre previously, and prices of diesel to be Rs. 88.27 per litre against Rs. 87.47.
Prices had been on a freeze since November 4, 2021, in light of the recent assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Goa, and Manipur. This record 137-day period of no revision of rates came to an end on March 22 with an increase of 80 paise per litre.
However, during this 137-day period, the cost of crude oil has had exorbitantly increased by USD 30 per barrel. The prices of both Petrol and Diesel are expected to rise further due to this exorbitant increase of crude oil in the International market as a result of the Russian-Ukraine Conflict.
The Oil companies had kept the prices constant since November 9 in the backdrop of the announcement of the Centre regarding Rs. 5 per litre cut and Rs. 10 per litre cut in excise duty on petrol and diesel respectively.
“There is a massive surge of demand at fuel stations (retail outlets) due to an increased delta of Rs 25/ltr between the retail and industrial price of diesel, leading to heavy diversion of bulk HSD (direct customers) to retail outlets. There is also the very heavy lifting of fuel by dealers and both B2B & B2C customers, who have advanced their purchases to top up their tanks and capacities in anticipation of the price increase which is overdue,” said a spokesperson of Reliance BP Mobility Ltd (RBML).
This development was seen in the light of the stark difference between bulk prices and retail prices of Diesel.
“As per industry experts, prices of both petrol and diesel need to be hiked by about Rs 0.52 for every $1 per barrel increase in the price of crude oil to allow OMCs to maintain their marketing margins,” reported the Indian Express.
India is 85% dependent on imports for its oil needs. In the past years, a push towards renewable energy by India has been evident in light of the current energy dynamics in the International Order.