Petrol, diesel prices could spike by Rs15 per litre in this week: Experts

New Delhi: Petrol and diesel prices are expected to spike this week as oil companies get ready to cut losses after they kept rates steady for more than four months before the assembly elections in five states.

International oil prices have jumped to a 13-year high of $140 per barrel.

Sources in the oil industry say that fuel prices need to be upped by 15 rupees a litre for retailers to come back up to break-even levels, according to a PTI report.

The five states that went to the polls are Uttar Pradesh, Uttarakhand, Punjab, Goa, and Manipur.

On the other hand, the Indian rupee dropped to a record low of 77.01 per dollar on 7 March.

Brent, the international benchmark, briefly hit more than $139 a barrel on Tuesday, 8 March.

That is its highest spike since 2008.

The recent increase in oil prices comes in the backdrop of Russia’s invasion of Ukraine, which is expected to further cut the already limited oil supplies.

Russia, after all, is one of the world’s largest energy producers.

Meanwhile, state-run oil companies, which control the domestic market, have not raised prices since Nov. 4, amid drawnout elections in several key states including India’s most populous state Uttar Pradesh, where Prime Minister Narendra Modi’s Bharatiya Janata Party is in power.

With voting done for the seventh and final phase of the Uttar Pradesh assembly elections on Monday, consumers fear the government will now move to increase prices as early as Tuesday.

Swapnil Phadtare, a farmer from the western state of Maharashtra, said he was stocking up diesel as domestic media reports said there could be a 15-20-rupee-per-litre hike in fuel prices in the wake of the elections.

“Harvesting of winter-sown crops will start shortly. We need lots of diesel during this period. To save money I decided to buy like other farmers in my village,” Phadtare said.

On Monday, oil prices spiked to their highest since 2008 as the United States and European allies weighed a Russian oil import ban and as delays in the potential return of Iranian crude to global markets fuelled supply fears.

Inputs with THE Quint and Reuters