Indian state refiners raised their retail prices for gasoline and diesel by the equivalent of $0.031 per liter in response to tighter crude oil availability. This is the first fuel price hike in India in four years, Bloomberg noted in a report on the news.
The hike amounts to over 3% and was necessitated by the global crude oil price surge that resulted in losses for India’s refiners. Still, New Delhi put off the price hike for much longer than other governments, due to the sensitivity of Indian consumers to such hikes.
The Economic Times reported that wholesale fuel prices had surged in April, with gasoline prices up by 32.4% and diesel prices up by 25.19%. That’s up from a monthly rise of 2.5% for gasoline in March, and 3.62% for diesel.
Since the war in the Middle East began and cut off over 40% of India’s crude oil flows, those that passed through the Strait of Hormuz, one of the highest-flying economies in Asia, has seen its oil import bill soar, investors fleeing the capital market, and the local currency plunging to an all-time low against the U.S. dollar.
As a result, the world’s third-largest crude importer saw its wholesale inflation jump to 8.3% in April from a year earlier, significantly accelerating from 3.88% annual inflation in March, government data showed on Thursday.
While India has crude oil stockpiles, it is advising conservation and earlier this week asked the United States to extend a sanction waiver on Russian crude amid the absence of viable replacements to lost Middle Eastern barrels.
Washington earlier extended the waiver to May 16, but this day is fast approaching with no change in the stalemate over the Strait of Hormuz, while Indian imports of Russian crude doubled from February to March, rising further to hit 2.3 million barrels daily earlier this month, according to Kpler data. This is an all-time high.
By Irina Slav for Oilprice.com
