Government Rules Out Fuel Price Hike Despite Rising Crude Oil Costs and Daily Losses

The government currently has no proposal to increase petrol and diesel prices despite a sharp rise in crude oil costs. Sources state that officials are focusing on ensuring energy security and maintaining a steady supply of fuel. Indian crude oil prices reached 115.27 dollars per barrel by September 22, with the average for the month at roughly 114.83 dollars per barrel. Fluctuations are expected to continue ahead of the US mid-term elections in November, adding uncertainty to fuel import bills and domestic prices. According to rating agency ICRA, keeping retail prices unchanged leads to an estimated daily loss of 530 crore rupees for oil marketing companies. Marketing margins are currently estimated at a negative 8 rupees per liter for petrol and a negative 9 rupees per liter for diesel, while under-recoveries on LPG cylinders are projected at around 300 rupees per cylinder in September 2026. A major reason for the price hike is disrupted global oil supply. Vessel movement through the Strait of Hormuz has been affected, limiting adequate oil deliveries and driving up prices, though the government is holding continuous talks to ensure safe passage. The government is also prioritizing energy security, steady crude purchases from Russia, and diversifying oil sources. Countries like Iraq and Saudi Arabia could play key roles in boosting crude reserves, and talks with them are under consideration. State-run fuel distributors face severe financial impact since they have not changed retail rates. Current estimates indicate that oil companies face losses of about 8 rupees per liter on petrol and 23 rupees per liter on diesel. If high crude prices persist alongside unchanged retail rates, financial support for oil and gas firms may be considered later. The government is attempting to balance three main priorities: keeping domestic fuel prices stable, protecting the finances of oil marketing companies, and securing uninterrupted energy supply amid rising geopolitical risks.