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Fuel Prices Stable as US-Iran Tensions Simmer
1 Jul
Summary
- Brent crude hovered near $73 as Iran seeks greater control over the Strait of Hormuz.
- Fuel prices remained unchanged on June 30 despite past increases.
- OMC under-recoveries for petrol and diesel have significantly reduced.
On Tuesday, June 30, Brent crude prices approached $73 a barrel. This occurred as Iran signaled its intention to play a more significant role in the management of the Strait of Hormuz, a crucial global energy chokepoint. These developments unfolded against the backdrop of upcoming negotiations with the US.
Despite previous supply-related price hikes due to the US-Iran conflict, the prices for petrol and diesel remained stable on June 30. This marks a period of steadiness following several earlier increases since the conflict's inception.
Data from the Ministry of Petroleum and Natural Gas revealed a considerable reduction in oil manufacturing companies' (OMCs) under-recoveries. For petrol, under-recoveries fell by 83% to Rs 3 per litre, and for diesel, they decreased by 75% to Rs 27 per litre.
Factors influencing fuel prices in India include global crude oil rates, the rupee-dollar exchange rate, central excise duty, and state-level VAT, which collectively contribute to the varying retail prices across different cities.
