State-run oil marketing companies (OMCs) on Saturday hiked the retail fuel prices of petrol and diesel by 80 paise per litre, the fourth such hike this week. Petrol costs Rs 98.61 per litre to consumers in Delhi now while diesel rate is Rs 89.87 per litre.
After a 137-day price freeze, OMCs raised auto fuel prices by 80 paise on March 22 and since then the cumulative increase has been around Rs 3.20 per litre.
The fuel retailers however continue to have high under recoveries on petrol and diesel due to below cost sales since November 4. According to analysts the fuel retailers will require price hikes in excess of Rs 15 per litre for diesel and Rs 13 per litre for petrol on an average fortnightly brent crude oil price of $115 per barrel (bbl).
As per estimates by Moody’s Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have together lost around $2.25 billion (Rs 17,000 crore) from petrol and diesel sales between November and March third week by keeping petrol and diesel prices unchanged despite a sharp rise in crude oil prices. Auto fuel prices in India have remained unchanged since November 4, 2021, despite crude oil prices averaging around $111/barrel (bbl) in the first three weeks of March 2022 compared to around $82/bbl in early November.
CRISIL Research said in a note that a Rs 9-12 per litre increase in retail price will be required by OMCs for full pass through of losses if average crude oil price stays at $100 per barrel, and Rs 15- Rs 20 per litre if the average crude oil price rises to $110-120 per barrel.
