India douses fears of retail fuel price hike amid panic buying

NEW DELHI: India has asked motorists to avoid panic buying and clarified that there was no proposal to raise pump prices for diesel and gasoline, a government official said on Tuesday.

“We have adequate supplies of liquefied petroleum gas, petrol, and diesel. There has been no increase in prices. Please avoid panic buying and do not believe rumours,” Sujata Sharma, Joint Secretary in the federal oil ministry, said at a news conference on Tuesday in an appeal to buyers.

India, the world’s third-biggest oil importer and consumer, has been hit by rising oil prices triggered by the closure of the Strait of Hormuz after the U.S.-Isreli war on Iran.

India’s crude import prices rose to $120 per barrel earlier this month, denting the margins of retailers on the sale of gasoline and gasoil, as the higher costs have not been factored into the pump prices.

India says fuel retailers suffering losses on petrol, diesel for sales below market rates

Indian refiners have not raised pump prices of gasoline and gasoil in four years to shield consumers, despite volatility in global markets.

Analysts at Kotak Institutional Equities in a recent report estimated there was a need to raise the price of a liter of gasoline and gasoil by 25-28 rupees after elections in some states end on April 29.

According to estimates by Mumbai-based ICICI Securities, profit after tax for these oil retailers likely declined by 82% in the March quarter over a year ago, as crude oil costs soared but retail prices did not move up in tandem.

Reliance Industries, operator of the world’s biggest refining complex and India’s biggest company by market value, late last week flagged “unprecedented” supply disruptions and a sharp hit to profit in its March-quarter earnings.