New Delhi, June 9: Pranjul Bhandari, Chief India Economist at HSBC, stated on Tuesday that if global crude oil prices remain high and India’s oil import bill continues to rise, petrol and diesel prices may see further increases.
In an exclusive interview with a news agency, Bhandari noted that the actual cost of imported crude oil in India has hovered around $110 per barrel in recent months. This situation is placing significant financial pressure on oil marketing companies (OMCs).
He explained, “In the past month, the cost of oil imports in India has been approximately $110 per barrel. At these levels, oil distribution companies are incurring substantial losses. The government has taken on a large part of this burden by reducing excise duty on fuel.”
Bhandari emphasized that the government cannot shoulder the entire burden of high global oil prices, and consumers will also need to bear some of the costs.
He remarked, “Consumers should also share part of this burden. Retail fuel prices have already increased by ₹7.5 per liter, but I believe there could be a slight further increase.”
In his view, a price hike of ₹10 to ₹12 per liter for petrol and diesel would be reasonable, as it would distribute the impact of global oil price shocks more equitably between the government and consumers.
Bhandari indicated that if international crude oil prices remain elevated, further increases in petrol and diesel prices cannot be ruled out.
He stated, “If this crisis continues and India’s imported oil bill remains high, additional increases in fuel prices are likely.”
His comments come at a time when the global crude oil market is experiencing ongoing volatility, putting pressure on energy import costs.
Earlier this week, the government revealed that the country’s oil marketing companies are still facing significant financial challenges. These companies are incurring daily under-recovery losses of approximately ₹600 to ₹700 crores, including losses from LPG sales.
During a press briefing in the national capital, Praveen Khanuja, Additional Secretary of the Ministry of Petroleum and Natural Gas, explained that these losses are primarily due to the widening gap between retail prices and international fuel costs.
According to him, the combination of high global fuel prices and controlled domestic retail prices is continuously increasing financial pressure on oil companies.
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DBP
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