Petrol and Diesel Prices May Rise Again Soon, Economists Warn of Bigger Burden on Common People
After the recent fuel price hike, economists are now warning that petrol and diesel prices in India could rise even further in the coming weeks, possibly by as much as ₹10 per litre.
India’s state-run oil marketing companies (OMCs), which control nearly 90% of the country’s fuel retail market, recently increased petrol and diesel prices by more than ₹3 per litre. The hike comes amid rising global crude oil prices triggered by ongoing tensions between the US and Iran, along with uncertainty surrounding peace talks in West Asia.
According to analysts at Emkay Global Financial Services, OMCs are currently suffering heavy losses despite earlier tax relief measures announced by the central government. The report estimates that oil companies are losing nearly ₹17–18 on every litre of fuel sold.
To reduce these losses, experts believe fuel prices may need to be increased by around ₹10 per litre. The hike could either happen in one go or be introduced gradually over the next two to three weeks.
Economists also fear the rising cost of fuel could further increase inflation and put more pressure on household budgets already struggling with expensive essentials. Higher fuel prices usually lead to increased transportation costs, which then affect food prices, daily goods and other services.
Economist Santosh Mehrotra said that every $10 increase in global crude oil prices can raise India’s inflation rate by around 0.3% and also widen the country’s current account deficit.
Meanwhile, Radhika Rao from DBS Bank noted that even a 3–5% rise in petrol and diesel prices could significantly impact headline inflation.
Experts believe that rising fuel prices, along with increasing costs of items like milk and cooking gas, may further squeeze middle-class and lower-income households in the months ahead.
News source: Information for this article was gathered from a variety of reliable news outlets.
