Centre to keep fuel prices unchanged as crude crosses $100
What's the story
Fuel prices in India are unlikely to rise immediately, even with global crude breaching $100 per barrel. The government reportedly wants oil marketing companies (OMCs) to absorb the impact of the price surge to shield the public from a price hike. The assurance comes as international crude oil prices have crossed $100 per barrel due to rising tensions in the Middle East and fears of supply disruptions through the Strait of Hormuz, a key global oil shipping route.
Price spike
Surge in crude oil prices rattles global financial markets
The price of West Texas Intermediate (WTI) crude has surged 17.4% to $106.8 per barrel, while Brent crude has jumped 15.65% to $107.2 per barrel, crossing the $100 mark for the first time since 2022. The sudden rise in prices has rattled global financial markets, with Asian stocks witnessing a sharp fall as investors assess the inflationary risks of this energy price spike.
Price stability
Domestic fuel rates remain unchanged
Despite the global surge in oil prices, domestic fuel rates in India have remained unchanged. In Mumbai, petrol is still priced at ₹103.49 per liter and diesel at ₹90.01 per liter. Normally, India adjusts retail fuel prices according to global crude movements but has occasionally asked OMCs to absorb part of the volatility during extreme price swings.
Stock assurance
Government dismisses allegations of LPG price hike
The government has also assured that India's energy stock levels are improving, giving confidence amid West Asia's volatility. Allegations of an LPG price hike have been dismissed as baseless. The government has also reduced reliance on the Strait of Hormuz by ramping up crude oil imports from other sources, with 70% now sourced from outside this key global oil shipping route.