Fuel prices on the radar as tension escalates between US and Iran

The sense of apprehension with regards to the overall price movement continues in the retail fuel space. Though the international crude prices have come off their recent highs, the market is expecting an uptick as tension between US and Iran escalate.

Retail fuel prices in India are near a one-year high as a result of the recent rise in global crude oil prices. However, there is a slight correction in prices today as the retail fuel prices are maintained at a 14-day average after India adopted the daily pricing mechanism as a part of the fuel price deregulation.

The international oil price movement has a significant bearing on the net import bills for India. Industry estimates indicate that if crude prices rise by $1 per barrel, the net import bill will increase by Rs 3,029 crore. Further, if exchange rate rises by a rupee to a dollar, the net import bill will increase by Rs 2,473 crore.