India holds fuel prices steady despite global crude surge

India kept petrol and diesel prices unchanged despite rising global crude after tensions near the Strait of Hormuz, while countries like UAE and United States saw sharp hikes, with oil firms absorbing losses to shield consumers

New Delhi: Even after the escalation in the West Asia conflict and rise in Brent crude oil prices due to the closure of the Strait of Hormuz, the fuel prices remain unchanged in India, while many countries have witnessed a jump of up to 85 per cent.

Data by Kotak highlighted a sharp divergence between India and both advanced and emerging countries, where consumers have faced increases in fuel prices so far this year, reports NDTV Profit. On the diesel front, prices have witnessed a sharp rise in several countries in recent months amid geopolitical tensions.

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Country-wise, the UAE saw an increase of around 85 per cent, followed by Australia and the United States, which recorded rises of more than 65 per cent and 62 per cent, respectively. Meanwhile, in Canada, Pakistan, France, Sri Lanka and Britain, prices rose between 35 per cent and 53 per cent.

Moreover, countries where prices increased more modestly include China and Brazil, while Russia stands out as an exception, with diesel prices rising only slightly — by over 1 per cent.

In contrast, diesel prices in India have remained unchanged at Rs 87.6 per litre compared to January levels, indicating zero increase despite the US-Iran tensions.

A similar trend has been observed in petrol prices. Neighbouring Pakistan has seen the highest, a 44 per cent jump in petrol prices, followed by the United States (42 per cent) and the UAE (36 per cent).

Meanwhile, petrol prices in Canada, Sri Lanka and China have risen by up to 34 per cent, while Australia, Britain and France recorded relatively moderate gains. Among countries with modest increases, Brazil and Russia reported hikes of over 7 per cent and 1 per cent, respectively.

In India, retail petrol prices have been kept at Rs 94.7 per litre compared to January levels, indicating no increase for consumers. India’s unchanged fuel prices highlight the degree of price stabilisation enabled by policy interventions and public-sector oil marketing company (OMC) pricing. Despite volatility in global fuel markets, Indian consumers have largely been shielded from the immediate pass-through of international price pressures.

In a first since fuel price deregulation, state-run OMCs are paying refineries a discounted price for petrol, diesel, aviation turbine fuel (ATF) and kerosene, in a bid to curb mounting losses arising from a self-imposed freeze on retail fuel prices, according to reports.

In another report, prominent brokerage Macquarie said that at spot petrol-diesel pricing of $135–165 per barrel, “we estimate India’s oil marketing companies incur losses of Rs 18 per litre on petrol and Rs 35 per litre on diesel”. The report added that every $10 per barrel increase in crude prices raises marketing losses by around Rs 6 per litre.