NEW DELHI — Retail prices of petrol and diesel remained unchanged across India’s major metropolitan areas on Friday, 29 March, as state-run oil marketing companies (OMCs) continued a de-facto freeze that has lasted since May 2022, according to rate sheets published by Indian Oil Corp. Ltd. (IOC).
IOC data showed petrol selling at Rs 96.72 per litre in the National Capital Region, Rs 106.31 in Mumbai, Rs 106.03 in Kolkata and Rs 102.63 in Chennai. Diesel prices stood at Rs 89.62, Rs 94.27, Rs 92.76 and Rs 94.24 per litre, respectively. Rates in Bengaluru were Rs 101.94 for petrol and Rs 87.89 for diesel.
India formally adopted a dynamic pricing system in 2017 under which OMCs adjust pump prices every morning in line with global refined product benchmarks and currency movements. Yet the three state-controlled retailers — IOC, Bharat Petroleum Corp. Ltd. and Hindustan Petroleum Corp. Ltd. — have left retail tags virtually untouched for nearly a year, absorbing swings in crude oil that ranged between USD 72 and USD 97 a barrel. Brent crude was trading near USD 86 on Friday afternoon.
“The companies appear to be balancing political optics with balance-sheet health,” said a Mumbai-based energy analyst at a foreign brokerage, noting that a six-week national election begins on 19 April. “Any rise at the pump right now risks becoming an election issue.”
OMCs recouped part of their under-recoveries in the December quarter when crude slipped, and many analysts expect them to delay any upward revision until after vote counting on 4 June. Officials at the Ministry of Petroleum and Natural Gas did not immediately respond to requests for comment.
Fuel taxes remain a critical revenue source, accounting for roughly 17 percent of the Centre’s indirect tax collections last fiscal year. A senior finance ministry official, who was not authorised to speak publicly, said the government “continues to monitor international markets” but sees “no immediate need” to tweak excise duties that were last cut in May 2022.
Market participants will watch for the quarterly results of IOC, BPCL and HPCL due in late May for clues on whether marketing margins remain sufficient to forestall price action. A sustained rally in Brent above USD 90, analysts warn, could force a revision regardless of political timing.
For now, motorists can expect stable forecourt prices through at least the election period, but the subsidy-by-stealth approach leaves OMC earnings and, by extension, future capital expenditure vulnerable to another sharp upswing in crude.