Petrol and diesel prices remained unchanged across major Indian cities on Wednesday, June 24, despite a decline in global crude oil prices amid signs of progress in diplomatic efforts involving Iran and the United States. Fuel prices had surged in recent months due to supply concerns linked to the conflict in the Middle East, but domestic rates were left untouched as oil marketing companies continued to monitor market conditions.

In the national capital, petrol continued to retail at Rs 102.12 per litre, while diesel was priced at Rs 95.20 per litre. Among other major cities, petrol prices stood at Rs 113.51 per litre in Kolkata, Rs 111.21 in Mumbai, Rs 108.01 in Chennai, Rs 115.73 in Hyderabad and Rs 110.89 in Bengaluru. Diesel prices remained at Rs 99.82 per litre in Kolkata, Rs 97.83 in Mumbai, Rs 99.66 in Chennai, Rs 103.82 in Hyderabad and Rs 98.80 in Bengaluru.

Fuel prices have risen significantly since the outbreak of the US-Iran conflict, with retail rates increasing four times during the period. The latest revision, announced last month, raised petrol prices by Rs 2.6 per litre and diesel prices by Rs 2.7 per litre. Overall, fuel prices have climbed by around Rs 7.5 to Rs 8 per litre since the beginning of the conflict, reflecting concerns over potential disruptions to global crude supplies.

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However, easing geopolitical tensions have helped bring down international oil prices. Brent crude futures were trading at around $76.47 per barrel on Wednesday after declining for a second consecutive session. The benchmark had settled 1.1 per cent lower on Tuesday, while US West Texas Intermediate crude closed down 0.9 per cent. Both contracts touched their lowest levels in nearly four months as investors responded to improving prospects for regional stability.

Market sentiment improved after Oman and Iran agreed to continue discussions regarding navigation in the Strait of Hormuz, a key global energy transit route. The decline in crude prices has largely erased the geopolitical risk premium that had built up during the conflict. Meanwhile, data from the Ministry of Petroleum and Natural Gas showed that under-recoveries faced by oil marketing companies have narrowed sharply, with petrol under-recoveries falling to Rs 3 per litre from Rs 24 and diesel under-recoveries declining to Rs 27 from Rs 105 per litre since April.

Fuel prices in India are influenced by a combination of international and domestic factors. Global crude oil prices remain the most important determinant because India imports a significant share of its oil requirements. Exchange rate fluctuations between the rupee and the US dollar, along with central excise duties and state-level value-added taxes, also play a crucial role in determining retail fuel prices. As tax structures vary from state to state, petrol and diesel rates continue to differ across cities despite being revised by the same oil marketing companies.

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