Petrol Prices to Rise Sharply Amid Iran-Israel Tensions — Will Driving Become Costlier?
Indian consumers may soon face a sharp rise in petrol and diesel prices as global crude oil markets witness increasing tensions.
New Delhi: Indian consumers may soon face a sharp rise in petrol and diesel prices as global crude oil markets witness increasing tensions. With petrol prices already hovering above ₹100 per litre in many parts of India, further hikes appear likely due to geopolitical developments and supply concerns.
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Geopolitical Tensions in West Asia Impacting Crude Oil Supply
A major reason for the anticipated fuel price hike is the escalating tension between Iran and Israel. As global crude oil supply largely depends on West Asian countries, any disruption in this region directly affects the global oil market.
The current conflict threatens the smooth movement of oil tankers across the Arabian Sea, potentially interrupting crude oil supply chains. Disruptions in supply can lead to a significant rise in crude oil prices, adding pressure on importing nations like India.
India’s Heavy Dependence on West Asian Crude
India sources a significant portion of its crude oil from countries such as Iran, Iraq, Kuwait, and Saudi Arabia. Any disruption in oil exports from these nations could strain India’s crude oil imports and increase fuel prices domestically.
Brent Crude Prices Surge Over 9%
Brent crude oil prices have already surged by more than 9%, reaching close to $75.61 per barrel. This spike in oil prices triggered sharp corrections in Indian equity markets on Friday, reflecting global investor concerns.
The escalating Iran-Israel conflict is sending shockwaves across stock markets worldwide, particularly affecting oil-related stocks.
Oil Marketing Companies Feeling the Pressure
India’s leading oil marketing companies are under increasing financial pressure due to rising crude oil prices. The cost of importing crude has gone up, and fears of shrinking profit margins have impacted stock prices:
- BPCL (Bharat Petroleum Corporation Ltd): Down 4%
- HPCL (Hindustan Petroleum Corporation Ltd): Down nearly 4.5%
- IOC (Indian Oil Corporation): Down approximately 3%
Crude-Dependent Industries Also Face Setbacks
Apart from oil companies, several other crude-dependent industries are at risk. Sectors like aviation, paints, adhesives, and tire manufacturing may also suffer due to increased input costs.
Even oil production companies such as ONGC and Oil India are vulnerable to the volatility, according to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Petrol and Diesel Prices May Soon Be Revised
Reports suggest that with the sharp increase in Brent crude prices, petrol and diesel rates in India might soon be revised upward. Over the past few months, fuel prices have remained stable. However, the current crude price surge may force oil marketing companies to review and potentially increase retail fuel prices.
Government’s Decision Awaited
While oil companies may review pricing, the final decision on any fuel price hike will depend on the central government’s policy direction. Indian consumers now await further announcements from the government regarding potential price adjustments.
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