Petrol, Diesel Rates Unchanged Despite Crude Oil Slump After U.S.-Iran Truce Signals

Petrol and diesel prices remained steady across India on Tuesday, June 16, even as international crude oil prices extended losses after the U.S. and Iran moved closer to a formal peace agreement expected later this week.

The absence of any revision comes despite a nearly 5% drop in Brent crude prices in the previous session. Fuel rates have remained unchanged after multiple hikes implemented during the U.S.-Iran conflict, which had disrupted global energy markets and pushed crude prices higher.

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Since the start of the conflict, petrol and diesel prices have increased by about ₹7.5-₹8 per litre, including the most recent hike of ₹2.60 per litre for petrol and ₹2.70 per litre for diesel announced last month.

Fuel Rates Across Major Cities

Under-Recoveries See Sharp Reduction

Data released by the Ministry of Petroleum and Natural Gas showed a substantial decline in under-recoveries faced by oil marketing companies.

The under-recovery of petrol stands at ₹3 per liter compared to ₹24 per liter on April 1st, registering an 83% drop. The diesel under-recovery is ₹27 per liter compared to ₹105 per liter, showing a decline of 75%.

During the peak of the conflict, state-owned oil companies were estimated to have incurred losses of ₹1,600-₹1,700 crore per day. Cumulative losses crossed ₹1 lakh crore over a 10-week period as elevated crude oil prices increased fuel procurement costs.

Crude Oil Stabilises After Sharp Fall

Global oil prices steadied on Tuesday after witnessing their biggest single-day decline in more than two weeks. Brent crude traded near $83 per barrel after falling almost 5% in the previous session, while U.S. West Texas Intermediate crude remained above $81 per barrel.

Market participants are awaiting details of an interim agreement expected to be signed by Washington and Tehran in Switzerland later this week. While U.S. President Donald Trump has indicated that the Strait of Hormuz could reopen following the agreement, official terms of the proposed arrangement have not yet been released.

Factors Influencing Fuel Prices

In India, there are many factors that determine the price of fuel at the retail level; however, the most important factor continues to be the international price of crude oil. The fluctuations in the rupee to U.S. dollar exchange rate also influence imports since India is highly dependent on imports for its crude needs.

Furthermore, the central excise duty as well as VAT play an important role, which has led to differences in petrol and diesel prices in cities. At the moment, the recent fall in international crude oil prices has not benefited Indian consumers since prices remain the same domestically.