India’s petrol pricing benchmark has risen to a 50-month high of $133.05 a barrel this month, putting state-run oil marketing companies (OMCs) under renewed pressure as geopolitical disruptions threaten to push international oil prices higher, according to industry officials and official data.
The average daily benchmark price for petrol between September 1 and 18 was 20% higher than the August average of $110.87 a barrel, according to the data. It has also surpassed the recent peak of $129.63 recorded in May, when state-run OMCs raised petrol and diesel prices four times in a month.
The sharp rise is already resulting in losses on retail sales for fuel retailers. OMCs are currently losing about ₹5 a litre on petrol and ₹20 on diesel, according to industry experts, who said some private oil companies have also begun restricting bulk diesel sales.
Also Read I Attacks by Yemen’s Houthi rebels on Saudi Arabia undermine regional security: MEA
The average daily benchmark price for diesel has also risen to a four-month high of $167.08 a barrel, although it remains below the April 2026 peak of $187.92 during the recent energy crisis, the experts said.
State-run OMCs raised petrol and diesel rates by ₹7.35 per litre and ₹7.53 respectively in May 2026 after their daily losses mounted to ₹1,000 crore.
Geopolitical volatility
The immediate concern for fuel retailers is that international crude prices could rise further if geopolitical disruptions worsen or India and China face greater pressure to reduce purchases of Russian oil.
“Public sector OMCs may absorb under-recoveries in the current quarter (July-September), but a price hike would be imminent if countries like China and India succumb to US pressure against buying Russian crude,” one of them said.
India and China are the world’s second- and third-largest consumers of crude oil after the US. Any significant reduction in their purchases of Russian crude could increase competition for supplies from other producers and add to upward pressure on international oil prices, the experts said.
Supply concerns have also been heightened by disruptions to energy flows through the Strait of Hormuz, the experts said. Saudi Arabian supplies have become less predictable following attacks on oil infrastructure and export supply lines, they said.
They also pointed to the risk of further disruption to shipping through the Bab al-Mandeb Strait, drone attacks on Saudi Arabia’s East-West pipeline and new US measures aimed at countries buying Russian crude.
Also Read I Flames, smoke seen near Saudi’s Riyadh airport, several flights cancelled after ‘major problems’: Reports
International crude markets remained volatile last week amid the geopolitical developments. Brent crude rose to $108.75 a barrel on Tuesday, September 15, on supply concerns after the Saudi East-West pipeline was hit by a Houthi drone. Saudi Arabia’s efforts to create alternative channels for moving crude subsequently eased some of the pressure, with Brent falling to $105.83 on Wednesday and to $103.87 by Friday’s close.
Experts cautioned that crude prices could rise again in the coming sessions if geopolitical disruptions intensify. “The current international oil price situation is alarming due to geopolitical reasons and fuel retailers will start losing profusely again if prices move further north,” one of the experts said.