Petrol and diesel prices increased again on Monday (Img: Internet)
New Delhi: Petrol and diesel prices increased again on Monday, marking the fourth hike in less than two weeks and taking the cumulative rise to more than ₹7 per litre. The increase comes as state-run oil marketing companies (OMCs) continue to face heavy financial pressure due to elevated global crude oil prices.
The latest revision has intensified concerns over inflation, especially as households are already dealing with rising costs of food, transport and daily essentials.
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Fuel prices have been revised upward in multiple phases over the last 11 days. According to market estimates, petrol and diesel rates have increased by around ₹7.38 per litre during this period.
Despite the hikes, analysts believe oil companies are still unable to fully recover losses accumulated during weeks of frozen retail prices when global crude prices surged sharply amid tensions linked to the Iran conflict.
India imports nearly 88 per cent of its crude oil requirement, making domestic fuel prices highly sensitive to international oil market fluctuations.
For more than two months, public sector OMCs reportedly absorbed losses while crude oil prices climbed globally. During that period, retail fuel prices remained largely unchanged, leading to significant under-recoveries for companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
Industry estimates suggest the combined losses of these firms crossed ₹1.2 lakh crore before gradual price revisions began.
Energy market experts say additional calibrated hikes cannot be ruled out if global crude prices remain elevated. Some financial assessments indicate that a much steeper increase would theoretically be needed for oil companies to fully offset earlier losses, although such a move is considered politically difficult.
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Analysts also noted that even small increases in fuel prices significantly improve the profitability of oil companies and help reduce daily losses.
There has been some temporary relief in global crude markets following reports of possible diplomatic progress between the United States and Iran. Crude prices reportedly softened slightly amid hopes of reduced tensions in West Asia.
However, experts caution that geopolitical uncertainty, shipping disruptions and high freight costs could continue to keep oil prices volatile in the near term.
The situation leaves policymakers balancing inflation concerns and consumer relief against the financial health of state-run oil companies.
