Petrol and diesel prices have to increase by ₹15 per litre for fuel retailers to break even, industry experts told PTI Monday, as oil companies plan to reduce losses accumulated from keeping rates steady in the run-up to elections in five states, including Uttar Pradesh. Oil cos are also looking to offset rising international prices that have skyrocketed as a result of Russia’s invasion of Ukraine; these have touched a 13-year-high of US$140 per barrel with brent crude, at one point, at over US$139 per barrel.
And, to compound matters, the rupee tumbled to a lifetime low of 76.96 against the US dollar. The previous low was 76.90 in April 2020, when the Covid pandemic was beginning.Oil cos have admitted they are incurring huge losses and insiders told Reuters they expect at least a ₹10 hike in prices if they are to break even. Last week a report by ICICI Securities said it expected a ₹15.1 per litre price increase.
India relies on overseas purchases to meet about 85 per cent of its oil requirements, making it one of the most vulnerable in Asia to rising prices.The basket of crude oil India buys rose to US$ 117.39 per barrel on March 3, the highest since 2012, according to the oil ministry.
