The retail price of fuel has been increasing consistently for a fortnight now. However, it doesn’t come as a shock to the consumers, given the clear indications that preceded the inevitable hike. Still, the consistent daily hike has led to the discomfort of many consumers.
Based on the rolling average of International benchmark prices, new prices are determined by the State-owned oil marketing companies (OMCs) every day at 6 AM. The fuel price for bulk consumers and aviation turbines was raised much earlier. Eventually, even the retail prices for petrol and diesel have risen. As of April 5th, 2022, the total increase now stands at Rs. 9.20 per liter.
Oil prices in India have remained largely stable or moving gradually in a particular direction. Despite the highly volatile oil prices environment, the global volatility in oil prices is not reflected as much at the gas stations. Since 2010, the prices have been decided by the public sector oil marketing companies such as Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL). Initially, the OMCs would raise the price by 10-25 paise daily. However, given that the prices remained unchanged for a long time, there was an under-recovery of around Rs 25 a liter. This in turn enforced the need to recalibrate the oil prices leading to the 80 paise daily hike, causing an uncomfortable jolt to the consumers.
However, the hike is calculated based on the assumption that crude oil prices may not surge as much as they did in March. The OMC is keeping a close watch on the global crude price and necessary action would be taken based on whether the global price increases or decreases. Despite all the efforts, the oil marketing companies are still looking at the possibility of sustaining losses for a longer duration.