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Fuel Prices Surge Again: What's Driving the Hikes?
25 May
Summary
- Petrol and diesel prices increased for the fourth time recently.
- Global crude oil volatility and geopolitical tensions impact prices.
- Rupee's weakness against the dollar increases import expenses.
State-run oil companies have implemented a fourth petrol and diesel price increase in less than two weeks, with cumulative hikes nearing Rs 7.5 per litre since May 15. This latest revision saw petrol prices rise by Rs 2.61 and diesel by Rs 2.71 per litre.
Global crude oil prices remain volatile due to geopolitical tensions, particularly involving the US-Iran conflict and supply concerns from West Asia. India, importing over 85% of its crude oil, is highly susceptible to these global market fluctuations and supply disruptions.
Despite recent price adjustments, oil marketing companies continue to face financial pressure. They have been absorbing substantial costs, leading to under-recoveries. Analysts estimate that even after these revisions, ongoing under-recoveries may persist, influenced by crude oil prices and exchange rate movements, with the depreciating rupee further increasing import expenses.
