International benchmark Brent crude oil price soared 45-month high of nearly $120 per barrel on Monday morning, 64% jump from $72.87 a barrel before the US-Israel war with Iran 10 days ago, squeezing Indian refiners’ margins on petrol and diesel.
Experts said Indian refiners, particularly state-run firms like Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation, should hold the pump prices for petrol and diesel as they had reaped huge benefits of lower international oil prices without proportionately reducing retail prices of auto fuels. Combined net profit of the three firms rose 192% to ₹57,810 crore in the first nine months of FY26 from ₹19,768 crore a year earlier.
Experts say that if war does not escalate further and disrupt the energy infrastructure of West Asia, international oil prices should not go beyond the $120-130 levels. International crude prices softened a bit during the intraday trade on Monday. After Friday’s close of $92.69 a barrel, Brent opened at $99.75 on Monday and went up to $119.5 a barrel to again slip to $116.64 (at 10:37am IST), 25.84% surge from Friday.
Brent last saw over $120-levels on June 8, 2022 ($123.58 a barrel) after Russia attacked Ukraine. The West Texas Intermediate (WTI) crude surged to $119.48 a barrel earlier on Monday. In June 2022, India’s petrol and diesel prices were ₹96.72 per litre and ₹89.62 per litre. From mid-March 2024, petrol and diesel rates were reduced by ₹2 a litre, bringing down their retail prices to ₹94.72 a litre and ₹87.62.
Auto fuel rates have been more or less static since then. Petrol is currently priced at ₹94.77 a litre in Delhi and diesel at ₹87.67 because of a marginal five-paise increase on October 30, 2024, on account of marketing cost adjustments.
Experts said the government may continue to shield Indian consumers from volatile international oil prices, as it has huge excise duty cushions on both petrol and diesel. Besides, the government had mopped up some of the gains from lower international oil prices last year. On April 8, 2025, the government raised the special additional excise duty (SAED) on petrol and diesel by ₹2 per litre each to garner about ₹34,000 crore annually. Currently, SAED on petrol is ₹13 per litre and on diesel it is ₹10 per litre.
The government often tweaks SAED to protect consumers from the vagaries of the international oil market. Its move to raise SAED on April 8, 2025, was followed by two earlier rounds of excise duty cuts in November 2021 and May 2022 that reduced pump prices by ₹13 per litre for petrol and ₹16 per litre for diesel.