Crude Oil Tops $108: Petrol-Diesel Prices May Rise Despite Govt Denial

Crude oil prices in international markets have surpassed $108 per barrel. The stalled peace talks between the US and Iran and the closure of the Strait of Hormuz have raised concerns about supply. Brent crude rose 2.6 percent on Monday to $108.10 per barrel, while WTI crude reached $96.70. This could have a direct impact on the Indian economy and the common man's pocket, leading to fears of a sharp increase in petrol and diesel prices.

According to a report by brokerage firm MK Global Financial Services, India's crude basket is trading at around $110 per barrel. Despite a ₹10 excise duty cut on March 27, 2026, oil marketing companies (OMCs) are incurring a significant loss (under-recovery) of ₹18-₹20 per liter on petrol and diesel. The report states that if the Strait of Hormuz remains closed for a prolonged period, the government may be forced to increase retail prices of petrol and diesel by an initial ₹10 per liter. This increase could be done to reduce oil companies' losses and balance the burden of inflation on the general public.

In its report, Emkay Global warns that if crude oil prices remain above $100 per barrel for the next 2-3 quarters, further price increases are possible. In such a scenario, petrol and diesel could become costlier by ₹18 to ₹20 in the next 3 to 6 months. This sharp increase in fuel prices will impact the entire economy and significantly increase inflationary pressures. This could have a direct negative impact on companies and their shares in the auto, non-banking financial companies, logistics, metals, and retail sectors. However, brokerage firms also believe that this energy crisis is temporary and that long-term tensions in the Gulf region are unlikely to persist.