Petrol and diesel prices steady despite crude oil volatility

Retail fuel rates across major Indian cities remained unchanged on 17 August even as global crude oil prices saw weekly gains of 6%, with Brent crude holding steady at around $88.50 a barrel. LiveMint reports that state-run oil marketing companies have insulated Indian consumers from fluctuations in global energy markets, with petrol in Delhi at ₹102.12 per litre and diesel at ₹95.20. The government has also revised export levies on petroleum products, reducing duty on diesel exports to ₹24 per litre from ₹25.5 and setting tax on petrol exports at zero for the 15-31 August fortnight.

Crude prices remain elevated amid stalled US-Iran talks over management of the Strait of Hormuz, which handles a fifth of global oil and LNG traffic. LiveMint notes that Iran's Army Commander-in-Chief Amir Hatani said the waterway is a 'God-given asset' and will never return to its former state, while US President Donald Trump welcomed a Mecca Joint Defence Agreement among Saudi Arabia, Turkey and Pakistan. Mediators from Qatar and Pakistan continue passing messages, but Iranian Foreign Minister Abbas Araghchi said an agreement with Oman would not mean reopening the strait, adding that no decision has been made to resume negotiations with the US.

AMP Chief Economist Shane Oliver said that without a sustainable peace deal, the flow of oil out of the Middle East could remain down 10-15%, pushing prices higher as reserves run down. Separately, economist Santosh Mehrotra warned that if India reduced Russian crude purchases by 50%, the annual oil import bill could rise by $5-10 billion, potentially increasing inflation by 0.3 percentage point. The government has attributed any mileage drop from E20 petrol to multiple factors, including driving habits and vehicle maintenance.