The Union government on Thursday said that there is “no proposal under consideration” to increase the prices of petrol and diesel amid the war in West Asia.
This came after a report by stock broker Kotak Institutional Equities estimated that fuel prices could be hiked by Rs 25 to Rs 28 per litre after the Assembly elections in five states conclude, reported CNBC-TV18 on Wednesday.
Polling in Assam, Kerala and Puducherry was held on April 9. Voting in Tamil Nadu and in the first phase of the West Bengal polls was taking place on Thursday. The second phase of polling in West Bengal will be held on April 29. The votes in all states will be counted on May 4.
On Thursday, the Union Ministry of Petroleum and Natural Gas said that the reports “suggesting a price hike of petrol and diesel are designed to create fear and panic amongst the citizens and are mischievous and misleading”.
“In fact, India is the only country where petrol and diesel prices have not increased in the last four years,” the ministry claimed. “Government of India and Oil PSUs [public sector undertakings] have taken relentless steps in order to insulate the Indian citizens from steep increases in international prices.”
In its report, Kotak Institutional Equities had estimated that fuel prices may rise as crude oil rates have remained high since the war in West Asia broke out on February 28. With the benchmark Brent crude hovering above the $100 per barrel-mark, the gap between global oil costs and domestic retail prices has widened.
The price of Brent was $78 per barrel on February 27, a day before the conflict started.
Fuel marketing companies in the country have been under strain as retail petrol and diesel prices have remained frozen despite a surge in global oil prices.
Global energy supplies have been disrupted as Iran has effectively blocked the Strait of Hormuz, the narrow water body connecting the Gulf to the Arabian Sea, for most international commercial vessels. About 20% of the global petroleum supply passes through the maritime chokepoint.
On April 17, Iran said that it had fully reopened the strait to commercial vessels after a 10-day ceasefire between Israel and Iran-backed militant group Hezbollah in Lebanon. However, a day later Tehran that said it was reimposing military control on the waterway, alleging “repeated breaches of trust” by the US.
Washington began blockading all Iranian ports on April 13.
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