India recently saw a fuel price hike of ₹3 per litre for petrol and diesel. The fuel price hike helped reduce the heavy losses faced by state-run oil marketing companies.
Earlier, oil companies were losing around ₹1,000–₹1,600 crore every day. After the price increase, daily losses dropped to about ₹750 crore. Officials from the Petroleum Ministry said the losses still remain significant even after the hike.
Global crude oil prices have increased sharply in recent months. Prices jumped from about $69 per barrel in February to more than $110 per barrel by mid-May. This surge mainly came from geopolitical tensions and disruptions in global oil supply.
India imports over 85% of its crude oil from international markets. Because of this heavy dependence on imports, rising global oil prices directly affect domestic fuel costs and the financial health of oil companies.
Experts say the price hike may slightly increase inflation but will reduce the financial pressure on oil marketing companies.
