Despite a sharp decline in global crude oil prices following the US-Iran peace agreement, petrol and diesel rates across major Indian cities remained unchanged on June 18. Fuel prices have largely held steady since the last round of revisions in May, when state-run oil marketing companies (OMCs) increased retail rates after months of stability.
The recent easing in crude oil prices has raised hopes of relief for consumers. However, there has been no fresh revision in domestic fuel prices so far.
Crude oil slides as geopolitical tensions ease
Oil markets continued to weaken on Thursday after tensions in West Asia showed signs of cooling. Brent crude futures, the global benchmark for oil prices, fell 1.12 per cent, or 89 cents, to $78.66 per barrel following developments linked to the reopening of the Strait of Hormuz.
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The decline came after the finalisation of a peace agreement between the United States and Iran. The Strait of Hormuz, a crucial route for global oil shipments, had been at the centre of supply concerns amid regional tensions.
Why were fuel prices raised earlier?
Indian fuel retailers had maintained a freeze on petrol and diesel prices for nearly 78 days despite fluctuations in international energy markets. During that period, OMCs absorbed a significant portion of the cost pressure arising from elevated crude oil prices and geopolitical uncertainties.
Last month, however, fuel prices were revised upward. State-owned retailers raised rates by a cumulative ₹7.50 per litre through a series of increases, beginning with a ₹3 per litre hike on May 15. It marked the first fuel price increase in more than four years.
Petrol and diesel rates on June 18
Among major metros, petrol is priced at ₹102.12 per litre in New Delhi, ₹111.18 in Mumbai, ₹113.47 in Kolkata and ₹107.88 in Chennai. In Bengaluru, petrol is retailing at ₹110.89 per litre.
Diesel prices stand at ₹95.20 per litre in Delhi, ₹97.83 in Mumbai, ₹99.82 in Kolkata and ₹99.65 in Chennai. Bengaluru residents are paying ₹98.80 per litre for diesel.
Strait of Hormuz reopening lifts market sentiment
Under the newly signed 14-point memorandum, Iran has agreed to allow toll-free passage through the Gulf Strait during a 60-day negotiation period. The agreement also outlines plans for restoring full traffic through the Strait of Hormuz within 30 days.
Announcing the development on X, Pakistani Prime Minister Shehbaz Sharif said, “The historic ‘Islamabad Memorandum of Understanding’ has been electronically signed today between the United States of America and the Islamic Republic of Iran. The Memorandum has been signed by honourable Presidents of both the countries and also endorsed by me as the mediator.”
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The fall in crude prices also supported the Indian currency. The rupee gained 10 paise to close at 94.50 against the US dollar.
“We expect the rupee to trade with a positive bias amid positive global market sentiments and softening of crude oil prices. Decline in the US dollar and softening of US Treasury yields may also support prices,” PTI quoted Research Analyst at Mirae Asset ShareKhan, Anuj Choudhary, as saying.
FAQs:
Why are petrol and diesel prices not falling despite crude oil prices dropping?
Fuel prices depend on taxes, refining costs and OMC pricing decisions, not just global crude oil rates.
Will the US-Iran peace deal reduce petrol and diesel prices in India?
Lower crude oil prices could ease fuel costs, but any reduction depends on future pricing decisions by oil companies.
