India set to witness hike in petrol, diesel prices next month

The Ukraine crisis has put pressure on oil companies to raise prices. Government sources told BT TV that the state-owned oil companies will have to pass on the rising crude prices to consumers. Sources added that since Brent, the global benchmark crude was around $80 per liter in November last year when the Indian government cut excise duty on petrol and diesel. Pump prices have remained unchanged since then. The price of Brent crude oil crossed $100 per barrel-mark on Thursday as Russian President Vladimir Putin declared war against Ukraine. Prices would eventually start increasing in the second week of March, the source added.

Sources also added that the Ukraine - Russia crisis will pinch India in gas prices as well as it meets half of its gas needs by importing LNG (Liquefied Natural Gas).  Though India's share of imports of LNG from Russia is miniscule, the crisis will push prices further, the source added. Oil prices will remain on the boil in coming months, unless Iranian oil comes to the market and that scenario is possible only when US-Iran talks see a breakthrough

“Higher crude oil prices will keep CPI inflation higher for longer, obliging the RBI to raise rates more than the two hikes we expected in Aug-Dec’22 – unless the government sharply cuts excise duties on petrol and diesel to contain fuel inflation,” ICICI Securities said in a note on Wednesday.