Petrol, diesel prices rise: Check rates in the four metros

New Delhi, Mar 22: The prices of petrol and diesel in Delhi is now at Rs 96.21 and Rs 87.47 per litre respectively.

The petrol price in Mumbai is at Rs 110.82, while the price per litre for diesel is Rs 95. In Kolkata, diesel is priced at Rs 90.62 per litre, while the cost of petrol is Rs 105.51. In Chennai, petrol is priced at Rs 102.16, while the cost of diesel is Rs 92.19 per litre.

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.

The brokerage said for oil marketing companies to revert to normalised marketing margins, retail prices need to increase by Rs 9 a litre or 10 per cent.

"We expect a combination of small excise duty cuts (Rs 1-3 per litre) and retail price hikes (Rs 5-8 a litre) to reflect the pass-through of $100 per barrel oil," it said.

Russia makes up for a third of Europe's natural gas and about 10 per cent of global oil production.

About a third of Russian gas supplies to Europe usually travel through pipelines crossing Ukraine.

But for India, Russian supplies account for a very small percentage. While India imported 43,400 barrels per day of oil from Russia in 2021 (about 1 per cent of overall its imports), coal imports from Russia at 1.8 million tonnes in 2021 made up for 1.3 per cent of all coal imports. India also buys 2.5 million tonnes of LNG a year from Gazprom of Russia.

While supplies at the moment seem to be of little worry for India, it is the prices that are a cause of concern.

Domestic fuel prices - which are directly linked to international oil prices as India imports 85 per cent of its oil needs - have not been revised for a record 118 days in a row.

Rates are supposed to be revised on a daily basis but state-owned fuel retailers IOC, BPCL and HPCL froze rates on sooner did electioneering to elect a new government in Uttar Pradesh, Punjab and three other states started.

Petrol costs Rs 95.41 a litre in Delhi and diesel is priced at Rs 86.67. This price is after accounting for the excise duty cut and a reduction in the VAT rate by the state government.

Before these tax reductions, petrol price had touched an all-time high of Rs 110.04 a litre and diesel came for Rs 98.42. These rates corresponded to Brent soaring to a peak of $86.40 per barrel on October 26, 2021. Brent was $82.74 on November 5, 2021, before it started to fall and touched $68.87 a barrel in December.

Though JP Morgan sees oil coming down to $86 a barrel by the October-December quarter, it can hit $150 in a scenario of Russian Energy exports coming to a halt.

"To summarise, in the event of completely shutting Russian oil supply (that is partially offset by a resumption of Iran exports and the use of strategic oil reserves), crude oil was forecasted to rise to $150 per barrel.

"However, in the event sanctions spared energy transactions but were intensified in other areas, our baseline view was that crude prices would rise to average $110 in 2Q22 (April-June) with prices spiking to $120 a barrel in the interim as markets priced retaliatory measures by Russia, such as curtailing oil supply," it said.

(With PTI inputs)