Govt kept fuel price hike minimal to protect citizens amid global oil shock, say dealers
New Delhi, May 15
Petroleum dealers have welcomed the government's decision to keep the fuel price hike limited to Rs 3 per litre despite rising global crude oil prices, saying the move has helped protect consumers from a sharper impact while oil companies continue to face financial pressure.
Speaking to ANI, Uttarakhand Petrol Pump Dealers Association President Ashish Mittal said the government has ensured that the impact of global crude oil inflation remains limited for consumers despite rising input costs.
"The government has kept increases minimal to reduce the burden on citizens. Despite the Gulf war period, the government has absorbed costs by cutting excise and taxes, ensuring rates remain stable," he said.
Mittal added that global crude oil prices have nearly doubled from earlier levels of around USD 62 per barrel, affecting oil companies' profitability and leading to changes in dealer credit systems.
"...companies made profits, but now they face losses and have shifted dealer credit policies to advance payments," he said, adding that fuel supply in the market remains unaffected.
Sharing a similar view, General Secretary, Lucknow Petrol Dealers Association, Alok Trivedi, said the government deserves credit for preventing a sharp increase in fuel prices despite global tensions.
"...the Prime Minister and government deserve praise for keeping increases modest," he said, adding that the hike has been limited to around Rs 3 per litre.
However, he flagged concerns over dealer commissions, saying they have remained unchanged for years despite fluctuations in fuel prices.
"...when rates rise, our commission should also be considered. It has not increased for years, leaving us in loss," he said.
Meanwhile, rating agency ICRA Limited said the Rs 3 per litre hike provides only limited relief to oil marketing companies, which continue to face significant losses.
Prashant Vasisht, Senior Vice President and Co-Group Head, ICRA, said oil marketing companies remain under financial stress despite the revision.
"ICRA estimates that at crude price of $105-110/barrel and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about Rs 500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike," he said.
He added that companies may need to reassess retail pricing if elevated crude oil prices persist.
The revision comes amid global crude oil volatility driven by the ongoing West Asia conflict and disruptions in key maritime routes, including the Strait of Hormuz. India has maintained that fuel supply remains stable with adequate inventories and uninterrupted distribution across the country.
— ANI
Reader Comments
As someone who drives daily in Bangalore traffic, I'm grateful the hike was minimal. But Rs 3 still adds up when you fill up weekly. The government should focus on boosting electric vehicle adoption to reduce our dependence on volatile global oil. At least the supply is stable—that's a relief!
This is a classic case of kicking the can down the road. The government is protecting consumers now, but oil marketing companies are bleeding Rs 500 crore daily! How long can this continue? We need a long-term energy strategy, not just stop-gap price caps. The Middle East situation could get worse.
While I appreciate the restraint, Rs 3 per litre is still significant when combined with GST on fuel and the hidden costs. The poor are hit hardest—auto drivers, farmers, small businesses. Also, dealers deserve a fair commission after years of no increase. The government must balance the books transparently, not just absorb losses that will hurt us later.
Good move by the government! We are a developing country and need stable fuel prices for our farmers and transporters. The global situation is beyond our control, but Modi ji is handling it well. Hope they also think about increasing dealer margins—those guys work hard through heat and rain. ढाबे पर चाय भी महंगी हो गई है, but that's another story 😅
I live in Mumbai and every rupee matters. Rs 3 is okay, but the long-term solution is reducing our dependence on imported crude. Why aren't we ramping up ethanol blending and solar faster? Also, ICRA's warning about Rs 500 crore daily losses for oil companies is
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