Petrol, Diesel Rates Unchanged Despite Sharp Drop In Crude Oil After Hormuz Reopening

New Delhi: After the recent drop in crude oil prices, a big question on people's minds is whether petrol and diesel will become cheaper in India. Meanwhile, state-owned oil companies have released new petrol and diesel rates for June 19. There has been no significant change in petrol and diesel prices today.

What are the new rates in the cities?

According to the latest prices released by government oil companies, there has been no major change in the prices of petrol and diesel today.

• In Delhi, petrol is being sold at Rs 102.12 per litre and diesel at Rs 95.20 per litre.
• In Mumbai, petrol is available at Rs 111.18 per litre and diesel at Rs 97.83 per litre.
• In Kolkata, petrol is Rs 113.51 per litre and diesel is Rs 99.82 per litre.
• In Chennai, petrol is being sold at Rs 107.77 per litre and diesel at Rs 99.55 per litre.

Some cities have seen minor changes. Gurugram, Noida, Jaipur, and Hyderabad have seen a slight increase in prices, while Bhubaneswar and Lucknow have seen slightly cheaper petrol and diesel prices.

Did crude oil price drop?

Global oil markets are experiencing a steady decline in crude oil prices. Brent crude is trading around $79 per barrel, while US WTI crude remains at around $75 per barrel. Over the past week, Brent crude has fallen by more than 9 per cent, marking one of the largest weekly declines in several months.

What did the government say?

Union Minister of State Suresh Gopi on Thursday stated that while global crude oil prices may be falling, Indian consumers won't see any immediate reduction in petrol and diesel prices. He explained that the impact of falling international oil prices takes time to reach petrol pumps. The minister explained that when global crude oil prices fall, fuel prices cannot be reduced immediately. Retail prices are influenced by several factors, including the time it takes for cheaper crude oil shipments to reach India, shipping costs, and insurance rates.

He said that domestic fuel prices do not depend solely on international crude oil prices. Several other factors, such as transportation costs, market conditions, and the cost of previously purchased crude oil, also play a role in determining prices.

The minister also said that no state government has given up revenue by cutting taxes during high fuel prices. The central government also has to run the country and maintain the financial strength of oil companies.

What did oil companies say?

State-owned oil companies have stated that all petrol pumps across the country have adequate stocks of petrol and diesel. Refineries are also operating at high capacity, and sufficient crude oil reserves are available. Oil public sector undertakings (PSUs) are regularly conducting surprise inspections to prevent fuel hoarding and black marketing. About 14 petrol pumps have been fined for violating regulations, while 598 petrol pumps have been suspended for violating market discipline guidelines.

How has the US-Iran peace agreement impacted?

The biggest reason for the drop in crude oil prices is believed to be the interim peace agreement between the United States and Iran. Following this agreement, shipping has gradually resumed through the Strait of Hormuz, one of the world's most important oil routes. This waterway handles approximately one-fifth of the world's total oil supply.

During the US-Iran war, oil supplies along this route were affected by sanctions imposed by Iran and the US, causing crude oil prices to rise sharply. Now, with the expectation of normalcy returning, market concerns about supply have eased.

Will customers soon get the benefit of cheap oil?

Experts believe that if crude oil prices remain low for a long time and supplies through the Strait of Hormuz return to full normal, petrol and diesel prices may see some relief in the future. However, the government currently maintains that the benefits of the recent decline in international prices may take some time to reach consumers. Therefore, a significant reduction in petrol and diesel prices should not be expected immediately.