Will the three-rupee hike reach Rs 30? Oil companies lose Rs 1600 crore daily

NEW DELHI: The Indians may have woken up on Friday morning with a shock. Petrol and diesel prices were hiked in India due to the crisis in the Strait of Hormuz following the US-Iran tensions. After days of anticipation over whether fuel prices would rise, oil companies finally increased rates today following the conclusion of the country’s elections. There was a hike of Rs 3 for petrol and diesel. The price increase is two rupees for CNG.

After the outbreak of the war, the operating costs of oil companies have increased significantly. This price increase comes at a time when things have come to a point where the loss in the first quarter of this financial year will reach Rs 1.2 lakh crore if fuel prices are not increased. However, the main question is whether the three-rupee hike in petrol and diesel will bring relief to oil companies.

The increase of Rs 3 will put a strain on the family budget of ordinary Indians. However, the present increase will help reduce some of the costs of oil companies. National media reported that a 50 paise increase per litre will increase profits. So, the current increase of Rs 3 will triple the profits. However, as long as the Iran war continues, the world is worried about the oil prices.

Meantime, oil companies will have to increase the prices of petrol and diesel by Rs 28 to 33 per litre to close the cost-income gap of about 30 per cent and 36.5 per cent for each product. However, from a political perspective, this will never happen. Especially in this situation where opposition parties are waiting to retaliate.