New Delhi [India], May 15 (ANI): Petroleum dealers have welcomed the government's decision to keep the fuel price hike limited to Rs 3 per litre despite rising global crude oil prices, saying the move has helped protect consumers from a sharper impact while oil companies continue to face financial pressure.
Speaking to ANI, Uttarakhand Petrol Pump Dealers Association President Ashish Mittal said the government has ensured that the impact of global crude oil inflation remains limited for consumers despite rising input costs.
"The government has kept increases minimal to reduce the burden on citizens. Despite the Gulf war period, the government has absorbed costs by cutting excise and taxes, ensuring rates remain stable," he said.
Mittal added that global crude oil prices have nearly doubled from earlier levels of around USD 62 per barrel, affecting oil companies' profitability and leading to changes in dealer credit systems.
"...companies made profits, but now they face losses and have shifted dealer credit policies to advance payments," he said, adding that fuel supply in the market remains unaffected.
Sharing a similar view, General Secretary, Lucknow Petrol Dealers Association, Alok Trivedi, said the government deserves credit for preventing a sharp increase in fuel prices despite global tensions.
"...the Prime Minister and government deserve praise for keeping increases modest," he said, adding that the hike has been limited to around Rs 3 per litre.
However, he flagged concerns over dealer commissions, saying they have remained unchanged for years despite fluctuations in fuel prices.
"...when rates rise, our commission should also be considered. It has not increased for years, leaving us in loss," he said.
Meanwhile, rating agency ICRA Limited said the Rs 3 per litre hike provides only limited relief to oil marketing companies, which continue to face significant losses.
Prashant Vasisht, Senior Vice President and Co-Group Head, ICRA, said oil marketing companies remain under financial stress despite the revision.
"ICRA estimates that at crude price of $105-110/barrel and considering past 10-year average crack spreads of auto fuels, oil marketing companies incur a loss of about Rs 500 crore daily on the sale of auto fuels and domestic LPG, even after factoring the fuel price hike," he said.
He added that companies may need to reassess retail pricing if elevated crude oil prices persist.
The revision comes amid global crude oil volatility driven by the ongoing West Asia conflict and disruptions in key maritime routes, including the Strait of Hormuz. India has maintained that fuel supply remains stable with adequate inventories and uninterrupted distribution across the country. (ANI)