With Nayara Energy, the largest privately managed fuel retailer, hiking petrol and diesel rates in India, the country is witnessing a big rise in fuel prices. Petrol is now selling as high as ₹5.30 per litre and diesel has been increasing by about ₹3 per litre though there are slight differences in the prices across states, thanks to local levies like VAT.
The revision of the price will be in the context of geopolitical tension between the United States and Iran that is shaking the world oil supply chains. The partial blockage and unsteadiness in and around the Strait of Hormuz a major channel of sending crude to the world market has added to the supply issue, allowing fuel retailers to increase their input charges.
Nayara Energy, that run just under 7,000 petrol pumps in India, have been reported to have been passing on some of these higher prices to consumers. It is reported that with the artificially low prices, the government does not compensate the loss incurred by the private fuel retailers as is done to state owned oil companies. Due to this, the ever-increasing financial pressure has forced them to change the retail prices.
Russian oil giant Rosneft is the majority shareholder of the company and its pricing action is in line with global tendencies in the energy market. Fuel prices have been creeping up over the last few weeks as a result of volatility in crude oil markets and supply disruptions.The recent increase will affect transportation expenses and inflation, adding extra financial strain to consumers who are already struggling with increasing living costs.