Petrol And Diesel Prices On June 19: Fuel Rates Hold Steady Across Major Cities

Petrol and diesel prices remained unchanged across major Indian cities on June 19, even as international crude oil prices extended their decline following the easing of geopolitical tensions in West Asia.

State-run oil marketing companies (OMCs) kept retail fuel rates unchanged after implementing four price increases during the recent U.S.-Iran conflict. Cumulatively, petrol and diesel prices have risen by around ₹7.5-8 per litre since the escalation began earlier this year.

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Fuel Prices In Major Cities

Under-Recoveries Ease For Oil Companies

Data released by the Ministry of Petroleum and Natural Gas earlier this week showed a sharp reduction in under-recoveries faced by OMCs.

Petrol under-recoveries have declined by 83% to ₹3 per litre from ₹24 per litre recorded on April 1. Diesel under-recoveries have fallen 75% to ₹27 per litre from ₹105 per litre during the same period.

The reduction follows a fall in crude oil prices after the U.S. and Iran reached an interim understanding that paved the way for the gradual resumption of shipping activity through the Strait of Hormuz, one of the world’s key oil transit routes.

Crude Prices Extend Weekly Losses

Global oil benchmarks continued to weaken as concerns over supply disruptions eased. Brent crude traded near $79 per barrel and was set for its steepest weekly decline in several months, while U.S. benchmark West Texas Intermediate hovered around $75 per barrel.

Much of the risk premium that had lifted crude prices during the conflict has been unwound with the return of shipping activity. Oil prices have now given up most of the gains recorded since hostilities began in February.

What Determines Fuel Prices In India?

The retail price of petrol/diesel is affected by international prices of crude oil because India relies on a considerable amount of its crude needs to be imported. Fluctuations in the exchange rate of the rupee relative to the U.S. dollar can influence the cost of imports.

In addition to international factors, the central excise and state level value added taxes (VAT) play an important role in fixing the price. Differences in local taxes lead to variations in petrol and diesel prices across cities.

For now, lower crude prices have eased pressure on fuel retailers, although retail rates remain unchanged after the revisions undertaken over the past month.