While Nayara has announced a uniform increase of Rs 5 per litre for petrol and Rs 3 for diesel, the effective price rise differs across states due to variations in local taxes such as Value Added Tax (VAT)
Pic/PTI
Nayara Energy on Thursday increased petrol prices by Rs 5 per litre and diesel by Rs 3 per litre, becoming the first major fuel retailer in India to pass on the impact of rising global crude oil prices to consumers, reported news agency PTI.
The price hike comes against the backdrop of a sharp surge in international oil prices triggered by escalating geopolitical tensions in the Middle East.
Private Retailer Passes on Rising Input Costs
Sources indicated that the company decided to revise retail fuel prices due to mounting pressure from higher crude oil costs. Global oil prices have risen significantly in recent weeks following military actions involving the United States and Israel against Iran, which led to retaliatory measures and disrupted supply dynamics, reported PTI.
As a result, international crude prices surged nearly 50 per cent since late February, prompting private fuel retailers to reassess pricing strategies.
Price Impact Varies Across States
While Nayara has announced a uniform increase of Rs 5 per litre for petrol and Rs 3 for diesel, the effective price rise differs across states due to variations in local taxes such as Value Added Tax (VAT), reported PTI.
In some regions, petrol prices have reportedly increased by as much as Rs 5.30 per litre, reflecting the influence of state-level levies on final retail prices.
State-Owned Firms Continue Price Freeze
Despite rising global prices, state-run oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited have maintained a freeze on retail petrol and diesel prices since April 2022, reported PTI.
These firms collectively control nearly 90 per cent of the domestic fuel retail market and have absorbed losses during periods of high crude prices, offset by profits when prices soften.
However, they recently increased prices of premium petrol and bulk diesel supplied to industrial users, while keeping regular fuel rates unchanged.
Other Private Players Hold Rates Despite Losses
Another private retailer, Jio-bp—a joint venture between Reliance Industries and BP—has so far refrained from raising fuel prices despite reportedly incurring losses, reported PTI.
Industry sources noted that unlike public sector companies, private retailers do not receive government support to cushion losses, leaving them more exposed to fluctuations in global oil markets.
Global Oil Volatility Driving Domestic Pressure
International crude oil prices had climbed to around USD 119 per barrel earlier this month amid intensifying geopolitical tensions, before easing slightly to about USD 100 per barrel, reported PTI.
India, which imports nearly 88 per cent of its crude oil requirements, remains highly vulnerable to such global disruptions, particularly as a large portion of supplies pass through the strategically important Strait of Hormuz.
Concerns over shipping disruptions and insurance withdrawals in the region have further strained supply chains, adding to pricing pressures.
Government Maintains Deregulated Pricing Policy
The government has reiterated that petrol and diesel prices in India are deregulated, with oil marketing companies responsible for setting retail rates based on market conditions.
Currently, in the national capital, petrol continues to retail at Rs 94.77 per litre and diesel at Rs 87.67 per litre for standard grades, even as private players begin adjusting prices in response to global trends, reported PTI.
(With inputs from PTI)
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