Why Fuel Price Hike Has Become Inevitable Now?

Petrol and diesel prices have been hiked thrice in India in the recent past. With the Middle East conflict leading to a rise in global crude cost, state-owned retailers raised the price of petrol and diesel by nearly Rs 5 per litre. Further rise in retail fuel prices is inevitable if the current crisis continues, said Raj Kumar Dubey, Director HR, Bharat Petroleum Corporation Ltd.

Initially, the hike of fuel prices by 20-50 per cent was considered temporary but with the way things are shaping, he said that it would continue.

In this situation, there are three options before the government, Dubey said. The price should be hiked or the petroleum companies should take up the losses and make up more losses. The third option is the government fund the hike through deficit financing, he said.

He pointed out that the energy infrastructure has been destructed and restoring it would take a lot of time. “So, if the situation continues, there can be another price hike of fuel.” However, he did not mention the quantum of hike.

Though he said that a price hike was unavoidable, he said the country was making diplomatic efforts to diversify the oil procurement, to withstand the geopolitical tensions.

He said that BPCL and Indian energy companies have expanded sourcing significantly. Oil is being sourced from Russia or Africa or from many other places.

The consumption of fuel has increased in India after the war broke out and, we are able to manage without any shortages, he claimed.

At the same time, he said that the country was shifting to green energy. More than 200 GW of solar power facilities have been installed. As the import bill is continuously increasing due to the purchase of crude, green energy is the best option.

He said that the country should switch to green energy, solar, and hydrogen options as it would not only reduce our import bill but also our dependence on imports for fuels.