No fuel hike despite global oil prices rise

International oil prices rose about 9% following US and Israeli attacks on Iran and retaliatory strikes by Tehran, but retail petrol and diesel prices in India are unlikely to be increased in the near term, sources said.
Brent crude, the global benchmark, climbed close to USD 80 per barrel, while US-traded crude rose 8.6% to USD 72.79, up from around USD 67 on Friday.
For India, which imports 88% of its requirement of crude oil, which is turned into fuels like petrol and diesel at refineries, higher global prices translate into a larger import bill and potential inflationary pressures.
However, retail fuel prices are not expected to be raised immediately, as the government continues to follow a calibrated policy of allowing companies to build margins when international prices are low and cushioning consumers when rates rise, sources said.
Retail petrol and diesel prices have been on a freeze since April 2022, with fuel retailers absorbing losses when crude prices are high and making profits when rates are low.
This meant that when globally fuel prices went up in response to elevated crude prices, prices were stable in India. And when softening of crude prices pushed down fuel rates globally, rates in India remained unchanged.
The government wants to continue to shield consumers and the same policy will continue unless there is a huge spike in crude prices, they said.
With assembly elections in in critical states round the corner, it doesn’t want anything that could give the opposition a handle.
Oil Minister Hardeep Singh Puri Monday reviewed the situation on crude oil with ministry officials and public sector companies.