India's state-run oil marketing companies are absorbing heavy losses to keep petrol and diesel prices unchanged, with reports indicating daily losses of approximately Rs 530 crore as retail prices stayed frozen while crude input costs surged through September.
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation kept domestic fuel prices steady all through the week ended October 2, despite sharp swings in international crude. In Delhi, petrol stayed at Rs 102.12 per litre and diesel at Rs 95.20, while Mumbai recorded Rs 111.21 and Rs 97.83 respectively.
A volatile week for crude
Brent crude swung between $102 and $108 during the week. Prices initially climbed on concerns over possible supply disruptions after US-Iran negotiations broke down, then eased as Saudi Arabia restored part of its oil export infrastructure and US crude inventories rose unexpectedly by 922,000 barrels in the week ended September 25, according to the US Energy Information Administration.
Saudi Arabia restored around half the flows through its East-West Pipeline, which was handling at least 3.5 million barrels a day at the Red Sea port of Yanbu after being shut since September 10 following drone strikes. Saudi Aramco also began offering discounts of around $9 a barrel for crude loaded in Omani waters.
Despite the late-week easing, Brent still gained around 14 per cent during September, its strongest monthly rise since July. The Indian crude basket — the average price of grades actually imported by Indian refiners — averaged $116.04 in September, the highest since the US-Iran conflict began and 28.66 per cent higher than August, according to the Petroleum Planning and Analysis Cell. It touched a record $123.70 on September 28 before easing.
Rupee adds to the pain
The rupee breached the psychologically important 96-per-dollar mark on September 29, weakening to 96.14 after closing at 95.98 in the previous session, and has depreciated 6.66 per cent against the dollar since January 2026. The Reserve Bank of India intervened in both spot and non-deliverable forward markets, with state-run banks selling dollars believed to be on behalf of the central bank.
The Finance Ministry's Monthly Economic Review flagged the sharp rise in crude prices as a risk to the economy, noting that domestic price pressures intensified across retail, wholesale and producer levels. With India importing more than 85 per cent of its crude requirements, the combination of elevated crude and a weaker rupee has sharply amplified import costs.
Tax tweaks
The government reduced the windfall gains tax on exports of diesel and aviation turbine fuel for the fortnight beginning October 1 — diesel export duty fell to Rs 16 per litre from Rs 20, and the ATF tax to Rs 10.5 from Rs 15 — while the petrol levy stayed at Rs 0.5 per litre. Commercial LPG cylinder prices were raised by Rs 62.50 to Rs 2,810 per 19-kg cylinder, and aviation fuel prices rose Rs 16 per litre. Market participants will now watch the OPEC+ meeting on October 4 and the trajectory of US-Iran negotiations for directional cues.
Sources: Brent Swings $102–$108 on US-Iran Standoff as Petrol Holds Rs 102.12 and Diesel Rs 95.20 — HDFC Sky, Petrol, Diesel Prices On October 3: Check New Fuel Rates — NDTV Profit
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation kept domestic fuel prices steady all through the week ended October 2, despite sharp swings in international crude. In Delhi, petrol stayed at Rs 102.12 per litre and diesel at Rs 95.20, while Mumbai recorded Rs 111.21 and Rs 97.83 respectively.
A volatile week for crude
Brent crude swung between $102 and $108 during the week. Prices initially climbed on concerns over possible supply disruptions after US-Iran negotiations broke down, then eased as Saudi Arabia restored part of its oil export infrastructure and US crude inventories rose unexpectedly by 922,000 barrels in the week ended September 25, according to the US Energy Information Administration.
Saudi Arabia restored around half the flows through its East-West Pipeline, which was handling at least 3.5 million barrels a day at the Red Sea port of Yanbu after being shut since September 10 following drone strikes. Saudi Aramco also began offering discounts of around $9 a barrel for crude loaded in Omani waters.
Despite the late-week easing, Brent still gained around 14 per cent during September, its strongest monthly rise since July. The Indian crude basket — the average price of grades actually imported by Indian refiners — averaged $116.04 in September, the highest since the US-Iran conflict began and 28.66 per cent higher than August, according to the Petroleum Planning and Analysis Cell. It touched a record $123.70 on September 28 before easing.
Rupee adds to the pain
The rupee breached the psychologically important 96-per-dollar mark on September 29, weakening to 96.14 after closing at 95.98 in the previous session, and has depreciated 6.66 per cent against the dollar since January 2026. The Reserve Bank of India intervened in both spot and non-deliverable forward markets, with state-run banks selling dollars believed to be on behalf of the central bank.
The Finance Ministry's Monthly Economic Review flagged the sharp rise in crude prices as a risk to the economy, noting that domestic price pressures intensified across retail, wholesale and producer levels. With India importing more than 85 per cent of its crude requirements, the combination of elevated crude and a weaker rupee has sharply amplified import costs.
Tax tweaks
The government reduced the windfall gains tax on exports of diesel and aviation turbine fuel for the fortnight beginning October 1 — diesel export duty fell to Rs 16 per litre from Rs 20, and the ATF tax to Rs 10.5 from Rs 15 — while the petrol levy stayed at Rs 0.5 per litre. Commercial LPG cylinder prices were raised by Rs 62.50 to Rs 2,810 per 19-kg cylinder, and aviation fuel prices rose Rs 16 per litre. Market participants will now watch the OPEC+ meeting on October 4 and the trajectory of US-Iran negotiations for directional cues.
Sources: Brent Swings $102–$108 on US-Iran Standoff as Petrol Holds Rs 102.12 and Diesel Rs 95.20 — HDFC Sky, Petrol, Diesel Prices On October 3: Check New Fuel Rates — NDTV Profit
