The price of a barrel of crude oil purchased by India has risen to a decade high of USD 121, while retail gasoline and diesel prices have remained unchanged. According to statistics accessible from the oil ministry's
Petroleum Planning and Analysis Cell (PPAC), the Indian basket hit USD 121.28 on June 9, mirroring levels observed in February/March 2012.
As per the PPAC, the Indian crude oil basket averaged USD 111.86 per barrel between February 25 and March 29, the day after Russia's invasion of Ukraine sparked a price spike.
According to data, it averaged USD 103.44 per barrel between March 30 and April 27. On Thursday (09-06-2022), international oil prices remained at a 13-week high, supported by strong demand from important consumers like the United States.
On Friday (10-06-2022), though, they gave up some of their gains, with Brent oil futures for August falling 81 cents to USD 122.26 a barrel. The price of US West Texas Intermediate crude for July was USD 120.72 per barrel, down 79 cents from the previous month.
In India, however, retail petroleum prices are still frozen. Because India is 85% on imports to satisfy its oil needs, local pump prices are compared to worldwide prices.
Local pump rates are benchmarked to roughly USD 85 per barrel crude oil price, according to industry sources, but oil corporations haven't modified rates since they help the government control inflation, which is already at an almost eight-year high of 7.8%.
Fuel prices, particularly diesel, have a cascading impact on inflation since greater transportation costs lead to higher prices across the board, including staples like vegetables. According to the reports, the sector was losing around Rs 18 per liter on petrol and Rs 21 per liter on diesel.
Prices for gasoline and diesel were last adjusted to reflect current costs on April 6 and have remained unchanged since then. The government lowered excise duty on fuel by Rs 8 per liter and diesel by Rs 6 per liter last month, lowering costs.
Oil Minister Hardeep Singh Puri said last week that oil corporations are good corporate citizens and that the government does not dictate retail selling prices.
Despite rising oil costs, the three state fuel retailers first froze gasoline and diesel prices for a record 137 days starting in early November 2021, when five states, including Uttar Pradesh, went to the polls, and then went into a 65-day sabbatical in April.
While state-owned oil marketing companies (OMCs) have continued retail operations despite losses, private sector retailers such as Reliance-BP and Nayara Energy have scaled back operations in order to reduce losses. In certain areas, Nayara is selling fuel at a premium of Rs 3 per liter over the public sector. In Delhi, a liter of petrol costs Rs 96.72, and a liter of diesel costs Rs 89.62.
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