Petrol Price Hiked By Rs 2.09-2.35; After 4 Years, HPCL, IOCL, BPCL Increased Petrol Prices; EXPLAINED WHY

Petrol in India is getting costly due to the Middle East war, which has pushed energy prices higher. With global crude oil prices rallying to multi-year highs, oil marketing companies namely Indian Oil, BPCL and HPCL have hiked prices of premium petrol. It needs to be noted that regular petrol and diesel prices are unchanged. However, high-octane fuels, including BPCL Speed, HPCL Power and IOCL XP95 has witnessed a significant upside.

Premium Petrol Price Hike In India:

The OMCs increased high-octane petrol prices of Bharat Petroleum Corporation Limited's (BPCL) 'Speed,' Hindustan Petroleum Corporation Limited's (HPCL) 'Power', and Indian Oil Corporation Limited's (IOCL) 'XP95' by Rs 2.09 to Rs 2.35 per litre.

Fuel Prices Hiked Globally:

Notably, fuel prices have been impacted globally. In the USA who launched Operation Fury on Iran on February 28th, has witnessed a 20% surge in gasoline costs since then.

Meanwhile, China is selling fuel at a cost that is the highest since 2022. In the neighboring country, gasoline and diesel prices are hiked by 695 yuan ($100.46) and 670 yuan ($96.84) per metric ton.

On the other hand, fuel in the United Kingdom is at 18-month high. Gasoline prices also increased by 20% in Pakistan and 8% in Sri Lanka.

Why Did HPCL, BPCL, & Indian Oil Hike Petrol Prices?

The hike was unavoidable due to the crude oil price, which crossed over the $110 per barrel mark.

Analysts at Elara Capital said, "The US-Iran war has changed the way the Indian Oil & Gas sector reacts to crude prices. Our sensitivity analysis at Brent crude oil price of $100, $125 and $150 ($65 base case) shows 'EBITDA swing range' from a collapse of >400% for OMCs to 10-15x expansion for standalone refiners."

Furthermore, the analysts highlighted that for every $10 per barrel rise in crude, OMCs' diesel and gasoline margin would fall by Rs 6.3 per litre and LPG loss would widen by Rs 10.2 per Kg, implying a Rs 328 billion rise in annual LPG under-recovery.

According to a report of Elara Capital, above $110 per barrel crude, retail fuel prices hike are unavoidable. But if crude rallies over $125 per barrel, retail price could be hiked by Rs 8.14 per litre even if the government trims excise duty.

If crude is above $150 per barrel, the retail fuel prices could spike by Rs 26-30 per litre.

However, India still has a meaningful tax buffer as excise duties - Rs 19.9/liter on gasoline and Rs 15.8/liter on diesel - could provide shock absorption.

"Per our analysis, retail gasoline and diesel prices could be fully protected through excise cuts until ~$110/bbl crude. Beyond $110/bbl crude, gasoline and diesel price hike would become inevitable," analysts at Elara said.

Crude Oil Prices Latest:

Currently, US WTI Crude Futures is at $96 per barrel, while Brent Crude is near $110 per barrel. Earlier this month, crude did cross $120 per barrel mark.

Iran continued attacks on neighboring countries despite Israel signaling it would avoid targeting energy infrastructure, while both sides exchanged fresh blows, including strikes in Tehran. President Donald Trump downplayed the recent surge in oil prices, saying the situation could have been worse and may end soon, as per Trading Economics.

Latest data of Systematix report reveals that total crude oil export volume declined to 228million bbls for the week ended 7th Mar and subsequent to 184million bbls for the week ended 14th Mar compared to 268million bbls per week in Feb'26. Drop is largely attributed to lower volume from Middle East.

Additionally, as per the data from Bloomberg, India's import volume also nosedived to just 1.9 million bbls at week ended 6th Mar vs 25 million bbls per week in Feb'26 and 35 million bbls per week in Mar'26. Though data is not available but it must be very low at the end of 2nd week as well which picked up from the third week.

How Is Fuel Prices Decided In India?

Fuel prices in India are decided on various factors. These include:

- International Crude Oil Prices Movement

- Excise Duty

- Currency Exchange Rates

- Sales Tax Or Valued Added Tax (VAT)

- Other Tax Implications

- Commissions to dealers