The prices of petrol and diesel increased by Rs 3 per liter.Image Credit source: ai generated
India’s government oil marketing companies (OMCs) do not seem to be getting much relief from the increase in petrol and diesel prices after a long time. For the first time since 2022, the prices of petrol and diesel were increased by ₹ 3 per liter, but the market reaction was opposite. Despite the increase in prices, shares of oil companies fell and investors became worried.
After the increase in prices on Friday, shares of HPCL and BPCL fell by about 3%. According to market experts, investors started feeling that the increase of only ₹ 3 per liter was not enough to handle the rapidly increasing losses. The price of Brent crude oil in the international market still remains above $100 per barrel and at present there are no signs of the Iran-America war ending.
Companies suffer so much loss every day
In the ET report, quoting rating agency ICRA, it has been claimed that this small increase in petrol and diesel will provide only limited relief to the oil companies. He estimates that if the price of crude oil remains between $105-110 per barrel, then oil companies may suffer a loss of about ₹500 crore per day. This includes both auto fuel and domestic LPG sales. Now the price of petrol in Delhi has become ₹ 97.77 per liter and diesel ₹ 90.67 per liter. But experts believe that this increase is very less compared to the current deficit.
Will petrol and diesel become more expensive?
Experts believe that at current crude oil prices, companies are incurring losses of up to ₹17-18 per litre. This simply means that oil companies may have to suffer a loss of ₹ 57,000 crore to ₹ 58,000 crore in a quarter. To meet this loss, there may be a need to increase the price by at least ₹ 10 per liter. This increase can be done all at once or gradually over 2-3 weeks. This will also affect the general public and inflation may increase. To put it plainly, the increase of ₹ 3 per liter is considered to be much less than the requirement. For this reason there was disappointment in the market.
Crude oil prices rise
Due to Iran war, there is pressure on crude oil prices in the international market. In February, Brent crude was around $69 per barrel, which increased to $120. At present its price remains around $107 per barrel. America-Israel-Iran tensions and concerns about oil supply have made the market unstable. Experts say that the impact of rising oil prices will not be limited to just petrol and diesel. Transport and logistics will be expensive, due to which the prices of everyday goods and services may also increase. This will have a direct impact on the budget of common families.
Also read- Increase in prices of petrol and diesel, increase by Rs 3 per liter
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
