Petrol and diesel price hikes are likely to resume after state elections get over next week. This is to bridge the Rs 9 a litre gap created by international oil prices soaring past USD 100 a barrel.
Crude prices up
International crude oil prices shot above USD 110 a barrel for the first time since mid-2014 following the war in Ukraine. There are fears that oil and gas supplies from energy giant Russia could be disrupted, either by the conflict in Ukraine or retaliatory western sanctions.
Record high price
The basket of crude oil India buys rose above USD 102 per barrel on March 1. This compares to an average of USD 81.5 per barrel price of the Indian basket of crude oil at the time of freezing of petrol and diesel prices in early November last year.
JP Morgan's report
JP Morgan said in a report that with the state elections getting over next week, daily fuel price hikes are expected to restart. The seventh and final phase of polling for the Uttar Pradesh legislative assembly is on February 7 and the counting of votes slated for March 10.
Fuel retailers making loss
State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are making a loss of Rs 5.7 a litre on petrol and diesel. This is without taking into account their normal margin of Rs 2.5 per litre.