For the first time since the conflict in West Asia began, India’s average crude oil import price has dipped below $70 per barrel, offering some relief to fuel retailers. However, motorists might not experience a drop in petrol and diesel prices immediately. The Indian crude basket now stands at approximately $68.86 per barrel, marking a dramatic decrease of over 50% from its peak during the height of the conflict, which had initially sent global oil prices soaring. This decline has allowed state-owned fuel companies to recover from previous losses sustained while maintaining stable retail prices throughout the crisis.
Currently, oil marketing companies are seeing profits from petrol sales, though they continue to endure losses on diesel. According to officials, these companies are expected to prioritize recuperating past losses before implementing any significant reductions in fuel prices for consumers. With more than 88% of its crude oil sourced from abroad, India remains heavily reliant on international energy markets. The conflict had driven crude prices up and caused disruptions around the Strait of Hormuz, leading to increased costs for fuel companies.
In an effort to shield consumers from the full impact of the global energy upheaval, the Indian government previously lowered excise duties on petrol and diesel. Additionally, it absorbed substantial financial burdens to prevent a sharp increase in fuel prices during the crisis. The recent decline in oil prices can be attributed to diplomatic engagements among major world powers, which have mitigated fears of further escalation, alongside the recovery of energy shipments through critical routes.
The petroleum ministry of India has emphasized that the country successfully avoided fuel shortages, thanks to a diversified range of oil supplies, enhanced import infrastructure, and strategic reserves. Despite the lower crude oil costs, it is anticipated that retail fuel prices will remain steady in the short term, as companies focus on addressing their financial setbacks before passing on the benefits to consumers.