India's petrol and diesel prices remain unchanged despite rising crude costs and a 6.3% August fuel-demand decline. According to reports from NDTV Profit, retail petrol and diesel prices have seen no immediate revisions since May 25, when a ₹7.5-per-litre hike was implemented. The current pricing structure shows significant variation across major cities, with Delhi recording the lowest petrol price at ₹102.12 per litre and diesel at ₹95.20 per litre, while Kolkata leads with petrol at ₹113.51 per litre and diesel at ₹99.82 per litre. Mumbai petrol is priced at ₹111.21 per litre and diesel at ₹97.83 per litre, while Chennai petrol costs ₹107.77 per litre and diesel ₹99.55 per litre.
Crude prices experienced significant volatility on September 12, with Brent crude futures settling at $104.61 per barrel and West Texas Intermediate (WTI) closing at $100.05. As reported by NDTV Profit, prices had surged to multi-month highs on September 11, with Brent reaching $107.63 and WTI hitting $102.48 amid ongoing US-Iran friction and supply disruption concerns. The recent pullback came after maritime conditions around the Strait of Hormuz have dramatically deteriorated, which had initially driven crude prices to elevated levels.
India's fuel consumption has shown concerning trends, with August fuel demand dropping 6.3% to a near two-year low of 18.61 million metric tons. According to NDTV Profit, this decline coincided with Brent crude breaching the $100-a-barrel mark, highlighting the challenging market conditions facing the oil sector. The 6.3% drop in fuel demand represents a significant shift in consumption patterns, occurring just as international crude prices reached multi-month highs.
US inflation accelerated significantly in August, with the consumer price index rising 3.4% year-over-year, while monthly inflation jumped 0.4% from July to August, up from just 0.1% the previous month. As reported by Associated Press, gas prices surged 3.9% monthly and are now more than 27% higher than a year ago, with the nationwide average cost of gas reaching $4.30 per gallon. The inflation data has increased pressure on the Federal Reserve to raise interest rates, with Wall Street investors now seeing more than 80% chance of a rate hike at the Fed's September 15-16 meeting. Economists warn that higher fuel costs could spread through the economy, potentially pushing up airline tickets, shipping costs, and other goods delivered by truck.
China is unlikely to adjust its oil product pricing mechanism despite higher freight and insurance costs for crude cargoes, according to sources at think tanks close to the matter at APPEC. Freight plus insurance premium currently amounts to about $30/b for shipping a VLCC cargo from the Gulf region to China, with Platts assessing dirty freight for a VLCC vessel at a record high of $162.16/mt on September 10, up 4% from the previous day. Six refining sources from the state-run sector said surging freight and insurance premiums are eating into their refining margins. On September 11, the Chinese government limited domestic gasoline and gasoil price increases to 260 Yuan/mt and 250 Yuan/mt respectively, versus hikes of 435 Yuan/mt and 420 Yuan/mt indicated by the pricing mechanism, citing a surge in international crude prices following renewed US-Iran conflict. Under China's current oil product pricing mechanism introduced in 2013, the government adjusts retail ceiling prices every 10 working days based on a basket of benchmark crude prices, with freight and insurance being minor, fixed elements in the formula.
