The price of bulk diesel sold to industrial users was hiked by about Rs 22 a litre on Friday, reflecting the spike in global oil prices amid conflict in the Middle-East, even as the rates of normal petrol and diesel remained unchanged.In Delhi, bulk or industrial diesel prices were raised from Rs 87.67 per litre to Rs 109.59. By contrast, a litre of normal diesel in the national capital continues to cost Rs 87.67, while normal petrol remains priced at Rs 94.77 per litre.
The increase in bulk diesel rates comes as international oil prices touched $119 per barrel on Thursday on intensifying Iran war, before pulling back to around $ 108 a barrel.At a media briefing, Sujata Sharma, joint secretary, ministry of petroleum and natural gas, said there is no increase in prices of normal petrol and diesel.“Some increase is reported in the premium category which hardly makes up for 2-4 per cent of the entire petrol (sold in the country),” she said. “There is no increase in price for the common man.”Pricing decisions, she said, are taken by oil companies independently as petrol and diesel pricing was deregulated in 2010 and 2014 respectively. “It (pricing) is decided by oil marketing companies. Government does not regulate petrol and diesel prices,” she added, as quoted by PTI.The government is closely monitoring global oil markets, but there is no immediate plan to raise retail fuel prices. Oil marketing companies are expected to absorb the current cost pressure for the time being.“Our priority is to make energy available to all consumers, which we have been doing all through the crisis. Till now we have not increased the prices,” she added.Retail petrol and diesel prices have been frozen since April 2022, with fuel retailers like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) absorbing losses when crude prices are high and making profits when rates are low.This meant that when global 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.India imports 88 per cent of its crude oil needs and roughly half of its natural gas requirement. These mostly come via the Strait of Hormuz. Following the US and Israeli attacks on Iranian government, military and nuclear facilities, Iran warned shipping away from the strait, and insurers withdrew coverage, effectively halting tanker movements.Prices had risen to $119 per barrel in June 2022 in the aftermath of Russia’s invasion of Ukraine.That year, oil companies had nominal profits, but in FY24, they posted record Rs 81,000 crore profit, helping make up for past dent in margins. This year, the three companies have posted Rs 23,743 crore profit in the December quarter alone.
