The movement in the petrol prices has not been in line with the changes in the crude oil prices and the foreign exchange rate for quite some time now. For example, on Friday, Brent Crude Oil Futures closed 23 cents lower at $67 a barrel and the Indian rupee had hit a fresh six-month high of Rs 69.10/dollar, which would have one assuming the petrol prices would have relaxed.
However, petrol prices across Indian cities were hiked once again on Saturday. In New Delhi, petrol price per litre was increased by 8 paise to Rs 72.63.
Interestingly, earlier this month between 5 to 8 March, the retail fuel prices remained unchanged. These rates are revised by the state-owned oil marketing companies on a daily basis at 6 am in as a reflection of the crude prices and the foreign exchange rate.
To keep the fuel price unchanged for a period as long as 4 days seems strange as crude futures are actively traded commodities whose prices keep fluctuating by the minute. This increase suspicion of governmental intervention as these oil marketing companies would otherwise face huge losses if prices remain lower than market rates.
It should also be observed that while Brent crude has come down from its above $80 a barrel level in October to $67, the reflection of the price change isn't as significant in rupee terms when compared to the Rs 84/litre price (as on 4 October 2018).
There are chances that the petrol rate changes might be stalled ahead of the elections, just like it was done ahead of major elections (like that during Karnataka state election).
Notably, back in 2014 Congress-led UPA government had lost elections at a time when petrol prices had risen sharply in September 2013 to Rs 83.67. A similar trend now prevails.
Being one of the essential everyday commodities for a common man as well as businesses, petrol and diesel prices do affect the sentiments of voters. This is largely due to the fact that not many understand India's dependency on imports for its fuel supply and that international rates govern the prices.
Hence, the government is usually blamed, and the NDA government could restore to withholding the price changes so as to prevent consumer outrage.