Petrol, Diesel Prices May Rise By ₹25–28 Per Litre After West Bengal Election: Kotak Equities Report

Domestic brokerage Kotak Institutional Equities has estimated a sharp fuel price hike may be needed if crude oil remains elevated, with timing likely linked to political decisions.

Petrol and diesel prices in India could rise by ₹25 to ₹28 per litre if global crude oil prices stay near current levels, according to an estimate by domestic brokerage firm Kotak Institutional Equities.

The report suggests that while there is a strong economic case for increasing fuel prices, any decision may depend on political considerations. With the final phase of ongoing assembly elections scheduled for April 29, major pricing changes are expected only after the voting process ends.

Why A Price Hike Is Being Discussed

The brokerage said high crude oil prices have sharply increased pressure on refiners. Tensions in West Asia, particularly around the Strait of Hormuz, have created uncertainty in global oil supply and triggered volatility in prices.

India imports a major share of its crude oil needs, making domestic fuel pricing sensitive to international market movements.

Import Bill Rises Despite Lower Volumes

According to estimates, India’s crude oil import volumes fell by around 13% to 15%, but the overall import bill still rose by nearly $190 million to $210 million per day due to higher prices.

The report added that refiners may be facing an additional burden of around ₹270 billion per month.

To ease pressure, the government has earlier reduced excise duty by ₹10 per litre and reimposed windfall tax measures, but analysts believe these steps offer only partial relief.

Impact On Households And Inflation

If fuel prices rise sharply, the impact could go beyond vehicle owners. Transport costs for vegetables, groceries and other essentials may increase. Taxi, auto-rickshaw and logistics charges could also rise, adding fresh pressure on inflation.

Air travel and freight-linked sectors may also feel the impact if energy costs remain high.

Consumption Trends

Despite supply concerns, petrol and diesel demand remained strong. Petrol sales reportedly rose 7.6%, while diesel consumption increased 8.1% during the period cited in the report.

This indicates that domestic fuel demand remains resilient even amid uncertainty in global markets.

What Happens Next

Any final decision on retail fuel prices will depend on crude oil trends, government policy and election timing. Analysts say increases, if approved, may be gradual rather than sudden to reduce the inflation shock.

Disclaimer: Fuel price projections are based on market estimates and may change depending on global crude prices, taxation and government decisions.