For 50 days since the Middle East became the setting for Mad Max: Fury, miracles have taken place at petrol pumps across India. Gasoline and diesel are flowing into the tanks of scooters and cars at the same prices as four years ago. This is in contrast to more than 120 countries that have increased fuel prices by up to 40%, according to World Gasoline Prices. [dot] com is a data aggregator and research platform that tracks energy prices around the world.
The penguins of Madagascar may be the ones to help calm Indians. Madagascar is one of about 20 countries where petrol and diesel prices have not increased. This is truly a miracle as no major economy in the world has frozen fuel prices like India. EXCEPT PREMIUM GRADE FUEL. There is magic behind miracles and we will explain that as well.
The United States has abundant oil reserves and refining capacity, Gasoline (gasoline) prices have been raised Gasoline prices have increased by up to 40% since the start of the war with Iran on February 28th. The national average for regular gasoline in the United States in February was about $2.94 per gallon. By early April, prices had risen to around $4.11 to $4.14 per gallon.
Closer to home, Pakistan has increased the price of petrol by 42.7% to PKR 458.40 per liter.according to Reuters. Pakistan’s Oil Minister Ali Pervaiz Malik said the price rise was due to global instability in supply and prices, forcing the government to pass the burden on to consumers. Similar fuel price increases are occurring in Nepal and Sri Lanka. The case of Bangladesh is interesting, so I’ll explain it a little bit.
Not only does fuel power industry, but its interest rates have a direct impact on inflation (price increases). The economic impact is two-pronged. Inflationary pressures are tying the government’s hands as it has to rely on fiscal consolidation and allocate more to fuel, while rising oil prices have slowed manufacturing.
A sharp rise in oil prices is disastrous for a fast-growing economy like India. Approximately 90% of oil demand is imported.
Like India, China is the world’s growth engine and imports oil. The government increased fuel prices while reducing the burden on the industry. By late March, fuel prices in China had increased by about 20%. However, the Chinese government intervened to soften the impact by regulating the scheduled pricing mechanism.
While India has not raised prices at all, China has decided to raise prices modestly out of consideration for oil refiners, the industry, and its people. It is impossible for a major economy like India to continue absorbing price shocks.
A Macquarie Group report cited by several media outlets said the state-run fuel retailer was losing 18 rupees per liter of petrol and 35 rupees per liter of diesel.
India’s pump charges are linked to global oil prices, and the last increase was in May 2022.
Retail prices in Delhi remained unchanged at Rs 94.77 per liter for petrol and Rs 87.67 for diesel. Some private retailers like Nayara Energy; It overcame a small price increase (Rs 5 per liter) in March.. Government oil marketing companies (OMCs), which dominate the market, have slightly increased the price of premium fuel but kept the price of regular fuel unchanged.
Average gasoline price ($ per liter)
| country | January | February | march | April (mid-month) | Rate of change (January to April) |
|---|---|---|---|---|---|
| us | $0.83 | $0.86 | $1.08 | $1.06 | +27.7% |
| England | $1.85 | $1.90 | $1.93 | $2.00 | +8.1% |
| China | $1.25 | $1.28 | $1.34 | $1.37 | +9.6% |
| Brazil | $1.20 | $1.23 | $1.25 | $1.29 | +7.5% |
| South Africa | $1.15 | $1.17 | $1.18 | $1.20 | +4.3% |
| Pakistan | $1.30 | $1.40 | $1.51 | $1.65 | +26.9% |
| bangladesh | $0.98 | $0.98 | $1.03 | $1.10 | +12.2% |
| India | $1.04 | $1.04 | $1.04 | $1.04 | 0% |
Source: GlobalPetrolPrices(dot)com
government Ethanol and gasoline must be mixedThis will reduce import dependence. The government has also reduced excise duty on petrol and diesel to ease the burden on OMCs. However, there are rumors that state-run OMCs are asking for price hikes while political executives think otherwise. And the miracle of the gas pump continues.
There may be magic behind India’s miracles. That magic is called elections.
“April 28 is Tankhulu Day,” satirist and columnist Kamlesh Singh said, referring to the last day of voting in the West Bengal assembly elections.
Apart from Bengal, elections are also being held in Assam, Kerala, Puducherry and Tamil Nadu. Results will be known on May 4th. The BJP-led Center may have tried to stabilize petrol prices to convey the message that “all is well.”
The story of Bangladesh applies here. Bangladesh, which has a new government after elections in February, has been trying for weeks to stem fuel price increases. Increasing fuel prices is seen as an unpopular measure. But Dhaka finally bowed to reality and raised prices. On Saturday (April 18), petrol will cost Tk19 to Tk135 per liter and diesel will cost Tk15 to Tk115 per liter.
India too has supported Prime Minister Tariq Rahman’s government. By supplying diesel. But shortages are evident, with long lines forming at petrol pumps across Bangladesh. A Dhaka resident told me last week that people had to wait six to seven hours in queues for fuel.
In late March, India’s government intelligence agency PIB fact-checked several reports and said there was no need to panic as the country’s fuel supplies were “stable and safe.” “India’s total stockpile capacity is 74 days and current inventory cover is around 60 days,” PIB Fact Check said in X on March 27.
While the government needs to ensure that fuel is available and there is no panic, What can be seen in the case of LPG cylindersthe price will definitely rise. There are calls for a connection between India’s pump miracle and the election.
“After the elections, it is only a matter of time before the prices of petrol, diesel and LPG are also hiked. The Modi government has no direction, no strategy, only empty rhetoric. The question is not what the government is saying, but what is left on our plates,” Rahul Gandhi, leader of the opposition in Lok Sabha, wrote in a post on X in March.
Even political parties in poll-bound Bengal are politicizing the issue.
Trinamool Congress general secretary Abhishek Banerjee, during an election rally in West Bengal, urged Prime Minister Modi and his cabinet to promise not to increase the prices of LPG, petrol and diesel for the next five years.
Then there’s the pre-emptive strike. Political intervention is most likely when the government decides to raise prices.
“When global oil prices fell 7 times in the last 12 years, India’s consumer prices were not brought down. Today’s announcement was due to parliamentary elections. Wait till April 30th,” Congress leader Jairam Ramesh posted on X.
On Monday, Brent crude oil prices rose 6.10% to $95.89 per barrel after the US seizure of Brent crude oil prices. Iranian-flagged ships near the Strait of Hormuz And Iran launched a drone attack on a U.S. military ship.
Prime Minister Narendra Modi warns that difficult times are just around the corner. India will need to stand united like in the corona era. The closure of the Strait of Hormuz and the burning oil infrastructure in the Gulf will not alleviate the situation in the short term. The International Energy Agency said this was the world’s worst oil crisis.
But apart from LPG shortage and diversion of gas from factories, are Indians feeling any kind of shock? Indians seem to live like the proverbial ostrich digging its head in the sand. However, the sand this time is from the Middle East, Energy infrastructure is burning around you. Gasoline and diesel prices will rise. I can only hope that it will be gradual and that there will be no shock after several weeks of miracles.
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