India's fuel prices have been raised four times in less than two weeks, with state-run oil marketing companies increasing petrol prices by ₹2.61 per litre and diesel by ₹2.71 per litre. The cumulative hikes since May 15 have taken petrol prices to ₹102.12 per litre and diesel to ₹95.20 in Delhi, the first time in four years that petrol prices have crossed the ₹100 mark.
The sharp rise in petrol and diesel prices is linked to the disruption of oil movement through the Strait of Hormuz, a vital energy shipping route. The US-Iran conflict has severely disrupted commercial movement through the strait, triggering fears of supply shortages across global markets.
Experts believe that more hikes may follow as state-run retailers try to recover current revenue losses and past under-recoveries accumulated while holding prices steady despite rising crude costs. Brent crude prices remain expensive, and daily losses for OMCs have not disappeared entirely.
The Centre had earlier hinted at difficult decisions, with Petroleum minister Hardeep Singh Puri saying that the government may have to take a view on petroleum pricing amid severe global supply disruptions.
Recent diplomatic developments have slightly cooled global oil prices, but the US has maintained that the effective blockade and restrictions around the Strait of Hormuz will continue until a formal agreement is reached.
The repeated hikes have sparked criticism, with state-run fuel retailers recently reporting strong profits. However, company executives maintain that current retail prices do not fully account for the sharp rise in global crude and transportation costs.
