'Time to cut petrol, diesel...': Market veteran Ajay Bagga urge relief for Indian consumers 

With global crude oil prices retreating from the highs triggered by the Middle East conflict, pressure is mounting on India's government and oil marketing companies (OMCs) to pass on the benefits to consumers through lower petrol and diesel prices. 

The recent easing in oil markets follows a diplomatic breakthrough between the United States and Iran, which has helped restore shipping movement through the Strait of Hormuz — one of the world's most critical energy corridors. The reopening has eased concerns over supply disruptions that had pushed crude prices higher earlier this year. 

Calls for relief 

Veteran market expert Ajay Bagga has argued that the decline in crude prices should be reflected at the fuel pump. 

In a post on X, Bagga said, "Indian Crude Oil basket at $74.34 on 23rd June. Time to cut petrol, diesel prices. Don't let OMCs make huge profits, give relief to the common user via petrol and diesel price cuts. The entire population pays for higher diesel prices via higher transportation costs for all items including food. Time to pass on the benefit to the economy." 

His remarks echo a growing sentiment among consumers and market observers who believe that lower crude prices provide room for retail fuel price reductions. 

Crude benchmarks ease

 

While crude prices have largely returned to pre-conflict levels, fuel prices in India remain elevated. The hikes introduced to offset higher input costs during the period of geopolitical uncertainty are still in place, prompting demands for a reassessment of retail fuel rates. 

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The Indian crude oil basket is currently trading around $75 per barrel, while the OPEC reference basket stands at approximately $80 per barrel. Global benchmark crude prices have fallen sharply from their recent highs as supply concerns eased and shipping routes normalised. 

Oil prices have now slipped to multi-month lows, reversing much of the surge seen during the peak of geopolitical tensions in West Asia. Analysts attribute the decline to recovering global supplies, improved market sentiment, and the resumption of maritime traffic through the Strait of Hormuz. 

What it means for consumers

Higher fuel prices continue to weigh on household budgets and business costs. Diesel, in particular, has a broad impact on the economy because of its role in transportation and logistics. Elevated diesel costs often translate into higher prices for goods ranging from food and consumer products to industrial materials.

Any reduction in petrol and diesel prices would provide direct relief to households while also helping ease inflationary pressures across the economy. Lower transportation costs can reduce input expenses for businesses and potentially moderate prices of essential goods.

The Indian basket of crude oil represents a derived basket comprising of sweet grade (Brent Dated) and Sour grade (Oman & Dubai average) of crude oil imported by Indian refineries during each month. Crude oil Indian basket as on July 24 stood at $70.71/bbl.

An analysis of OPEC basket price shows, global crude oil hit $110 per barrel on April 1, hitting a high of $124.91 on April 7, again hitting $122.75 per barrel on May 1 with gradual reduction to $77.37 per barrel on June 24.