New Delhi:As tensions rise in the Middle East following the conflict involving Iran, concerns have grown about a possible increase in petrol and diesel prices in India. However, despite a recent jump in global crude oil prices, fuel rates in major Indian cities have remained unchanged so far.

According to government sources cited by PTI, retail petrol and diesel prices are not expected to rise immediately. The government is reportedly following a calibrated approach that allows oil marketing companies (OMCs) to build margins when global crude prices are low and absorb shocks when prices rise.

A report by brokerage firm Nomura noted that OMCs may absorb part of the current rise in crude prices instead of fully passing it on to consumers.

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The report added that the government’s earlier decision not to cut retail fuel prices when global crude had fallen has created a buffer for companies to manage the latest surge.

“In theory, a 10% jump in global crude prices could add around 50 basis points to inflation if the entire increase is passed on to consumers, compared with the earlier estimate of 30 basis points. However, such pass-through rarely happens immediately,” the report said.

“Retail prices of petrol and diesel are unofficially pegged, with OMCs absorbing the impact through their balance sheets,” Nomura added.

Crude oil prices have already risen significantly amid the geopolitical crisis. Since the United States and Israel launched attacks on Iran, Brent crude has climbed about 16.8%, while WTI crude has increased by around 14%.

Brokerage firm Citi has warned that crude prices could test USD 90 per barrel if geopolitical risk premiums remain high. According to its outlook, oil prices may stay elevated for a longer period if the conflict involving Iran continues or spreads across the region.

However, if tensions ease quickly, prices could fall back toward USD 70 per barrel, Citi said.

Source: India Latest News, Breaking News Today, Top News Headlines | Times Now