Petrol, diesel prices likely to remain unchanged despite surge in global oil

Petrol and diesel prices in India are unlikely to be raised in the immediate future despite a sharp surge in global crude oil prices triggered by escalating tensions in the Middle East, according to government sources.

The government is currently expected to ask state-run oil marketing companies (OMCs) to absorb the impact of higher international prices for the time being, which may result in lower profit margins for the companies.

International crude prices surged sharply at the start of the week. West Texas Intermediate (WTI) rose about 27 per cent to around $116 per barrel, while Brent crude also climbed roughly 28 per cent to a similar level. Both benchmarks have now crossed the $100 mark for the first time since 2022.

The rally in oil prices followed escalating hostilities in the Middle East and concerns over disruptions to supply routes, particularly through the Strait of Hormuz, one of the world’s most critical energy shipping corridors.

Despite the global surge, retail fuel prices across India have remained unchanged so far. Although domestic petrol and diesel prices generally move in line with international crude trends, the government has in the past asked oil companies to absorb price fluctuations during periods of extreme volatility.

Officials indicated over the weekend that fuel prices would not be increased immediately, noting that India’s energy stock levels are improving and the supply situation appears to be stabilising.

The government’s confidence has also been supported by efforts to diversify crude oil imports. India has increased purchases from suppliers outside the Strait of Hormuz route in recent years in order to reduce exposure to geopolitical risks in the region.

According to officials, earlier about 60 per cent of India’s crude imports came from sources outside the strategic shipping corridor. That share has now risen to around 70 per cent.

Sources also noted that the first cargo of crude oil has recently begun moving again through the Strait of Hormuz, suggesting that supply flows may be gradually stabilising despite ongoing tensions.

However, energy market experts have warned that prolonged conflict in the region could trigger severe disruptions. Qatar’s energy minister Saad al-Kaabi recently cautioned that if the war continues for more than a few days, Gulf exporters might be forced to declare force majeure and halt deliveries, potentially pushing oil prices to $150 per barrel and natural gas prices to $40 per MMBtu within weeks.

Meanwhile, US President Donald Trump has defended the recent surge in oil prices, describing it as a temporary consequence of efforts to counter Iran’s nuclear programme. He said higher energy prices were a short-term cost linked to ensuring long-term global security.

With IANS inputs