Fuel prices remained unchanged across Indian cities on September 3, even as Brent crude hovered around $95.15 per barrel amid escalating US-Iran tensions. Brent crude futures were down 0.1% at $95.15 a barrel at latest check, following a 1% rise on Wednesday after the US and Iran exchanged military strikes, ending weeks of relative calm. According to NDTV Profit, state-run oil marketing companies kept petrol and diesel prices unchanged despite the crude oil price surge, demonstrating the resilience of India's fuel pricing mechanism. The sustained price stability comes as a prolonged conflict could put further pressure on global oil supplies and keep prices elevated, adding to concerns for major importers such as India.
As reported by NDTV Profit, current fuel prices across major Indian cities show petrol ranging from ₹102.12 per litre in Delhi to ₹115.69 per litre in Hyderabad. Diesel prices varied from ₹95.20 per litre in Delhi to ₹103.82 per litre in Hyderabad. The price differential reflects regional tax structures and local market conditions across different states. In Delhi, petrol continues to be priced above ₹100 per litre at ₹102.12, while diesel is retailing at ₹95.20 per litre. Mumbai has also continued to see petrol prices above the ₹110 mark, with petrol selling at ₹111.12 per litre and diesel at ₹97.78 per litre. In other major cities, petrol prices remain above ₹110 per litre in Kolkata (₹113.43), Chennai (₹107.75), Bengaluru (₹110.93), while diesel prices are below ₹100 in these cities, except in Hyderabad, where diesel is priced at ₹103.82.
The crude oil price surge follows renewed US-Iran strikes that raised concerns over disruptions to supplies from the Middle East, a key source of oil for India. The US military said it had struck Iran's Islamic Revolutionary Guard Corps, targeting air defences, radar systems, maritime assets, mine-laying capabilities and communications sites. Iran's Revolutionary Guard later said it targeted US military positions in Jordan, Kuwait, Bahrain, Iraq and the UAE in retaliation. The renewed fighting has raised concerns over oil flows through the Strait of Hormuz, a key global energy chokepoint. More than 17 million barrels of oil transited the strait on Monday, though flows remain below the roughly 20 million barrels per day recorded before the war. The Strait of Hormuz remains a major risk for global oil flows, with the latest incident demonstrating the ongoing vulnerability of key shipping lanes to geopolitical tensions.
According to local oil industry sources, US oil prices have gained about 9% this week as markets price in a higher risk of Middle East supply disruptions. President Donald Trump has also indicated little interest in negotiations with Iran, with Washington shifting towards economic pressure through a naval blockade and expanded sanctions. Prices were further pushed downwards by signals of a potential return to mediation to end the war and reopen the Strait of Hormuz after Iran said it had resumed talks with Oman. However, supply disruption risks remain an issue as the market is still constrained. Regional prices of both diesel and gasoline declined because of rising refined products outflows from China due to renewed refined product export allowances, and also due to incremental flows from the US and India. The source noted that regional diesel and gasoline prices trended downward for the week due to supply increases from both India and China.
As reported by NDTV Profit, volatile crude prices in international markets do not often lead to changes in domestic fuel prices, as several factors are considered by state-run oil marketing companies. These include rupee-dollar exchange rate, refining costs, taxes, dealer margins, and other variables for determining daily fuel prices. The pricing mechanism ensures domestic rates remain responsive to local market conditions rather than solely following international crude movements. The rupee-dollar exchange rate is another key variable, given that India relies heavily on imported crude. When the rupee weakens against the dollar, the cost of procuring crude rises, which can feed directly into higher retail fuel prices. Taxes levied by both the central and state governments make up a substantial portion of the final price, which is why petrol and diesel rates differ across states. Transportation costs and prevailing demand-supply conditions also factor into the retail price consumers see at the pump.
