Third fuel price hike in 10 days: Petrol up 87 paise, diesel 91 paise

📌 Summary:

• Petrol and diesel prices were raised by up to 91 paise per litre on May 23 — the third hike in less than 10 days; in Delhi petrol rose to Rs 99.51 and diesel to Rs 92.49 per litre

• State-run oil marketing companies (OMCs) began raising prices on May 15 — the first increase in over four years (prices were unchanged since April 2022 and cut once before the 2024 Lok Sabha polls); cumulative hike is nearly Rs 5 per litre

• Driver: the West Asia conflict and closure of the Strait of Hormuz pushed global crude from about USD 70 a barrel (pre Iran-US war) to over USD 100 a barrel, straining OMC finances

• The government had earlier absorbed high prices to insulate consumers; OMCs are now passing on costs as their losses mount

• The Ministry of Petroleum and Natural Gas assured (May 22) that India has adequate petrol and diesel supplies and urged citizens to avoid panic buying, attributing retail outlet pressure to temporary high demand

🎯 UPSC Relevance: GS3 Indian Economy — energy security, vulnerability of an import-dependent economy to global crude shocks, pricing of petroleum products and fiscal-inflation trade-offs.

📝 Prelims Facts:

• India imports over 85 percent of its crude oil requirement

• The Strait of Hormuz is a critical chokepoint through which a large share of global seaborne oil passes

• Petrol and diesel are priced by OMCs under a dynamic (daily) pricing mechanism and are outside the ambit of GST

🔑 Key Term: Oil Marketing Companies (OMCs) — state-run firms (IOC, BPCL, HPCL) that refine, distribute and retail petroleum products and revise pump prices under dynamic pricing.