The Indian government, according to KPMG International’s Global Head for Energy, Natural Resources and Chemicals, Anish De, has effectively handled the impact of global crude oil volatility. De highlighted that stable fuel availability has been maintained due to strong refining capacity and supply systems, ensuring uninterrupted access to petrol and diesel. Recent fuel price increases in India, reflecting global crude oil movements with a lag, have seen a roughly Rs 5 per litre hike, significantly lower than the 70% rise in global crude oil prices.
Further adjustments in prices are possible if crude prices remain high, with De indicating the potential for more hikes. He mentioned that recent price increases have covered about 25% of the losses, with companies still bearing the remaining 75% due to continued under-recovery in fuel pricing. Despite this, India does not face any fuel shortage concerns at wholesale or retail levels, with sufficient refining capacity and no supply issues.
De clarified that there is no shortage of crude availability in global markets and India has ample refining capacity, ensuring a steady supply. While responding to reports of fuel outages at some retail outlets, he noted that he was not aware of specific cases and suggested that oil companies address such details. De emphasized that fuel price changes in India typically follow global crude movements with a delay, resulting in temporary cost absorption by companies.
Regarding the impact of geopolitical tensions in West Asia and the potential rollback of fuel prices if global crude moderates, De stated that pricing decisions are within the purview of companies. He expressed the view that there is still pending pent-up recovery in the pricing dynamics. De also suggested prioritizing bringing natural gas under the Goods and Services Tax (GST) framework before extending it to petrol and diesel, emphasizing the robustness of India’s fuel supply system supported by strong refining infrastructure and global crude availability.
