Government to start increasing petrol and diesel prices from next week for the first time in over 4 months

Petrol and diesel prices, which have been on a freeze for the past four months in view of assembly elections in states like Uttar Pradesh, need to be increased by over Rs 12 per litre by March 16 for fuel retailers to break even.

International crude oil prices shot above $120 a barrel for the first time in nine years on Thursday before retreating a little to $111 on Friday, but the gulf between cost and retail rates has only widened.

With international oil prices — on which domestic fuel retails are directly benchmarked — spiking in the last two months, state-owned fuel retailers “need a massive price hike of Rs 12.1 per litre on or before March 16, 2022, just to break-even and a price hike of Rs 15.1 is required” after including margins for oil firms, ICICI Securities said in a report

The basket of crude oil India buys rose to $117.39 per barrel on March 3, the highest since 2012, according to information from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry. This compares to an average of $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.

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