India raises petrol and diesel prices by Rs 3 per litre amid soaring crude costs
Petrol and diesel prices in India have risen by Rs 3 per litre. The increase aims to ease the financial strain on state-run oil marketing companies, which have faced heavy losses due to soaring crude prices. Despite the adjustment, these firms continue to operate at a loss. Before the price hike, oil marketing companies were absorbing losses of Rs 23-30 per litre on petrol and diesel. The latest increase has cut these under-recoveries to around Rs 10 per litre for petrol and Rs 13 for diesel. Even so, the rise was not enough to return the companies to profitability if crude prices stay high.
The adjustment has lowered daily losses from Rs 1,000 crore to roughly Rs 750 crore. However, cumulative losses since the start of the conflict are projected to surpass Rs 1 lakh crore by the end of May. Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, confirmed that no bailout package for these firms is currently under consideration.
Economists warn the price increase will add modest inflationary pressure. DBS Bank estimates the move could push headline inflation up by 15-25 basis points. The Rs 3 per litre rise in fuel prices has eased some financial pressure on oil marketing companies. Yet, losses remain significant, and no government support has been announced. The inflationary impact of the increase is expected to be limited but noticeable.
