Why aren’t fuel prices falling in India?:Oil firms earn ₹10.5/litre on petrol, ₹11/litre on diesel amid falling global crude prices

Crude oil prices, which had surged to record highs during the US-Iran war, have now fallen to a six-month low. The Indian basket of crude is currently priced at $68.69 per barrel, around 56% lower than the wartime peak of $157 per barrel. Despite this sharp decline, retail prices of petrol and diesel in India remain unchanged. According to DAM Capital, at current crude prices, oil marketing companies are earning margins of ₹10.5 per litre on petrol and ₹11 per litre on diesel. Crude prices have remained below $87 per barrel since June 1, a level at which oil companies are considered to be at break-even. This means they have been making profits continuously for the past 36 days. The US-Iran war began on February 27 and remained at its peak for the next 40 days, including the entire month of March. Crude oil prices also witnessed their steepest rise during this period. After the first ceasefire came into effect on April 8, the sharp rally eased, and crude prices stayed below $115 per barrel. Even during the period of the steepest price surge, the financial performance of oil companies remained strong. In the January–March 2026 quarter, the combined profit of India’s four largest oil companies was 22% higher than in the same quarter of 2024–25. This quarter included 33 days of the most intense phase of the war, when the Indian crude basket touched $157 per barrel. The average crude price stood at $125.7 per barrel in March, followed by an average of $111 per barrel over the next 60 days. Crude at $75 or $120, Petrol Prices Stay Almost the Same In 2018, crude oil was $80.08 per barrel, while petrol in Delhi cost ₹72.15/litre and diesel ₹70.21/litre. In 2020, crude fell to $43.41 per barrel, but petrol was still ₹68.20/litre. In 2022, crude rose to $119 per barrel, pushing petrol to ₹96.72/litre and diesel to ₹89.62/litre. By January 2023, crude dropped to $75 per barrel, but fuel prices remained unchanged. Oil companies said they were recovering past losses. What do the experts say? Manoranjan Sharma, the Chief Economist, Infomerics Ratings has claimed that oil companies are in a position to cut fuel prices based on their balance sheets, but continue citing past losses and future risks. He says pricing decisions prioritize company balance sheets over consumer relief. With crude now at $68.69 per barrel, petrol in Delhi costs ₹102.12/litre and diesel ₹95.20/litre. In 2022, during the Russia–Ukraine War, when crude was $120 per barrel, petrol was ₹95.47/litre and diesel ₹86.67/litre. Although crude has mostly remained in the $60–70 range since then, fuel prices have barely changed. Sharma says governments appear to believe consumers have become accustomed to high fuel prices. Before COVID-19, ₹70–80/litre was considered a comfortable petrol price. Now, around ₹110/litre has become the new normal. He adds that whenever crude prices fall enough to justify cuts, the Centre and states are likely to raise taxes to protect their revenues.