With one of the lesser percentage increases and one of the lowest absolute price levels among non-subsidizing economies, India has been less affected by the ongoing Middle East crisis’s impact on retail fuel costs.
India maintained petrol and diesel prices mostly stable throughout the 78 days between the closure of the Strait of Hormuz on February 28 and the oil marketing companies’ (OMCs) revisions on May 15, 19, 23, and May 25, while the rest of the world experienced price increases of 10, 20, 50, and even 90 percent in certain cases.
On retail prices, the headline move brought about by the cumulative Indian revision of just over Rs 7 per liter is about seven and a half percent, which translates to Rs 7. 35 per liter on gasoline and Rs 7. 53 per liter on diesel. This change raises the price of gasoline in Delhi from Rs 94. 77 to Rs 102. 12 and the price of diesel from Rs 87. 67 to Rs 95. 20.
The EU 27 weighted average is currently Rs 179 for petrol and Rs 184 for diesel, and every major developed economy now sells gasoline for more than Rs 150 per liter, with the majority selling for more than Rs 180.
Despite having lower nominal incomes, Pakistan and Nepal, India’s two biggest neighbors, have both made significant strides in gasoline prices, surpassing Rs 135 per liter. The Philippines, Myanmar, and Sri Lanka have surpassed Rs 130 per liter.
Only direct subsidisers (the UAE and Malaysia) and the US, which has inherently low fuel taxes, sell gasoline consistently below the Indian range.
As a result, India continues to make less money than any non-subsidizing competitor through the current upheaval, while also pricing petrol and diesel at or lower than the majority of the developing world and at around half the price of European pumps.
The majority of other large importing economies have transferred the expense to their consumers, with some even tripling gasoline costs in the course of 48 months. India has not.
Compared to all other large economies outside the directly subsidizing Gulf producers, the Indian revision of somewhat more than Rs 7 a liter—which is equivalent to about 7. 5% off the Delhi base—is the lowest material upward movement.
It is lower than Japan, every European economy, and even its South Asian rivals, who lack India’s buffers.