State-owned fuel retailers are absorbing significant losses as Brent crude crossed the $100 per barrel mark and US West Texas Intermediate gained nearly 2% to around $103, according to NDTV Profit. With retail petrol and diesel prices remaining unchanged, fuel retailers are losing around ₹5 per litre on petrol and ₹23 per litre on diesel as international crude oil prices surge. As per ICRA's Prashant Vasisht, marketing margins on petrol are negative ₹5 per litre and diesel at negative ₹23 per litre for the month of September till date. The losses are compounded by under-recoveries on domestic LPG at ₹200 per cylinder, highlighting the financial strain on government-owned retailers. The Times of India reports that with escalation in hostilities between Iran and the US, Brent prices have crossed the $100 per barrel-mark and the Indian crude basket is at approximately $109 per barrel. The spike in crude oil prices is expected to negatively impact the financial health of OMCs as fuel prices at the pump remain frozen despite soaring international crude prices.
As reported by NDTV Profit, the national average petrol price stands at ₹111.21 per litre, while diesel is priced at ₹97.83 per litre. In major metropolitan areas, petrol prices vary significantly with Kolkata commanding the highest at ₹113.51 per litre, followed by Hyderabad at ₹115.69 per litre. Mumbai and Bengaluru both maintain petrol prices at ₹111.21 per litre, while Chennai offers the most competitive rate at ₹107.77 per litre. Diesel prices show similar regional variations, with Kolkata leading at ₹99.82 per litre and Hyderabad at ₹103.82 per litre. The latest pricing data shows petrol prices in Delhi at ₹102.12 per litre, Bengaluru at ₹110.89 per litre, and Chennai at ₹107.77 per litre, while diesel prices range from ₹95.20 per litre in Delhi to ₹103.82 per litre in Hyderabad.
India's crude oil import bill rose 56.5% to $63.4 billion during April-July FY27, according to the oil ministry's Petroleum Planning and Analysis Cell (PPAC), as reported by Business Standard. This surge occurred despite import volumes remaining largely unchanged at 81.9 million tonnes during the April-July period, compared with 81.5 mt in the same period of the previous financial year. The net oil and gas import bill also increased 40.3% to $57.8 billion during the period. India imports nearly 90% of its crude oil requirements and around 50% of its natural gas requirements, making it particularly vulnerable to rising international prices. The government had previously raised petrol prices by a cumulative ₹7.35 per litre and diesel prices by ₹7.53 per litre in May through four instalments, but these increases have been insufficient to offset the current price surge.
The latest escalation began when Iran's Revolutionary Guards attacked two US destroyers and what they described as a US base in Jordan's Al Azraq with ballistic missiles in retaliation for US attacks on Iranian oil tankers. According to Moneycontrol, Jordan's air-defence systems destroyed 18 of the 20 ballistic missiles originating from Iranian territory, while two missiles fell in unpopulated areas with no casualties. US Secretary of State Marco Rubio warned Iran that the US would continue to strike Iranian oil tankers in retaliation for attempted attacks on US warships, stating "Iran continues to try to hit US naval ships, and for every time they do that or try to do that, they're going to lose tankers." The US Central Command carried out strikes near Iran's Kharg Island and Jask on Tuesday, targeting crude oil tankers as part of a broader campaign to squeeze Tehran economically. The Times of India reports that before the conflict began at the end of February, Brent crude had been trading around $70-$75 per barrel, making the current surge of over $25 per barrel particularly significant for Indian fuel retailers.
With OPEC+ holding output steady and geopolitical risk still high, prices are likely to remain volatile through the coming months, said Rajeev Sharan, Head of Research at Brickwork Ratings. Costlier crude will squeeze margins in oil-sensitive sectors such as aviation, paints, tyres, chemicals, logistics and parts of FMCG. "Dearer oil also adds to inflation risk and strengthens the case for the US Fed to sound hawkish, or even hike interest rates on September 16," he noted. A sustained higher oil prices could also complicate the Reserve Bank of India's inflation and interest-rate outlook. "We expect it to hold the repo rate at 5.25% at its October 7 review and stay watchful. A tightening bias cannot be ruled out if Brent stays above $100 and feeds into broader inflation," added Sharan. The impact on consumers would depend in part on how much of the increase is passed through to domestic fuel prices and how long international prices remain elevated.
