Petrol And Diesel Prices On July 13: Fuel Rates Undergo Some Changes With Rising Crude Oil Price

Fuel prices were mostly unchanged in India on July 13 despite a rise in the price of crude oil globally due to fresh geopolitical developments in the Middle East. State-run oil marketing companies continued their daily revision of retail fuel prices based on international market trends and other domestic factors.

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Petrol And Diesel Prices In Major Cities

The latest retail fuel prices in key cities are as follows:

Retail fuel prices vary across states because of differences in local taxes, dealer commissions and other levies.

Crude Oil Price Rises After Fresh Middle East Escalation

The crude oil price advanced after reports of fresh military action involving the U.S. and Iran heightened concerns over energy supplies. The reports indicated that the U.S. carried out strikes targeting sites in Iran, while tensions surrounding the Strait of Hormuz intensified after Iran again announced restrictions on the strategic shipping route.

The Strait of Hormuz handles a significant share of global crude exports, making any disruption a key factor influencing the global crude oil price. Brent crude futures climbed 3.5% to $78.67 a barrel, while U.S. West Texas Intermediate crude rose 3.4% to $73.87 a barrel.

The increase follows last week’s decision by OPEC+ to raise oil production. During a virtual meeting, seven member countries, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, agreed to increase combined output by 188,000 barrels per day from August after reviewing global market conditions.

What Determines Retail Fuel Prices?

Although the international crude oil price remains the primary driver of domestic fuel prices, several other factors also influence the final retail rates. These factors include refining cost, cost of transport, commission of dealers, central taxes and state taxes, and the value of rupee relative to the U.S. dollar.

There have been several changes in fuel prices in the recent months as the international energy market has responded to various geopolitical events and shifts in the level of output from leading oil-producing countries. Although there has been a revision in the export duty for some of the petroleum products at the Central government level, it has no direct effect on the retail prices of petrol and diesel.

The crude oil prices continue to be affected by geopolitical events and the domestic fuel prices will consequently be determined by changes in the international energy market.