Petrol, Diesel Prices Hiked By Rs 3 Amid Oil Crisis Due To Iran War

Petrol, Diesel Price Hike: Following days of anticipation, the Centre has finally hiked retail selling prices of petrol and diesel in four metro cities. The hike, effective from Friday (May 15), is the first in four years for retail consumers. The price of CNG has also been raised by Rs 2.

Here are the revised petrol prices (per litre) in the four metros:-

Here are the revised diesel prices for consumers in the four metros:-

OMC Losses Mount

Before this hike in retail fuel prices, the prices of premium petrol were raised in March. All the three major oil companies -- Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) -- had raised the prices of premium petrol and diesel.

However, these state-run oil companies were still bearing a loss of about Rs 1,600 crore daily. They were buying crude oil at a higher price, but not passing on the increase to retail consumers. They even approached the central government in this regard. According to media reports, the Modi government refrained from raising the fuel prices (so far) to keep inflation under control -- a rise in fuel prices impact the price of every other commodity.

India's major oil marketing companies (OMC) had their books in green before the Iran war began on February 28. When the war started impacting global crude oil prices, they tried to absorb the shock. However, the losses started mounting within weeks as the war sent international oil prices soaring by over 50 per cent. The basket of crude oil that India imports averaged $69 per barrel in February before the war in West Asia broke out. It averaged $113-114 per barrel in subsequent months.

Therefore, several top economists, including Finance Commission of India Chairperson Dr Arvind Panagariya, said petrol, diesel prices should be allowed to rise.

PM Modi's Appeal To Save Fuel

Earlier, Prime Minister Narendra Modi also urged citizens to conserve fuel, and work remotely (if possible). This, he said, would reduce India's foreign outflows and save forex reserves.

Backing the PM's call, the Government of Delhi led by Chief Minister Rekha Gupta announced a 90-day public campaign aimed at encouraging citizens to adopt lifestyle changes that reduce fuel consumption and support the domestic economy. She also announced two days work from home for government offices.