Petrol and diesel prices, which have been frozen for the previous four months due to assembly elections in states such as Uttar Pradesh, must be raised by more than Rs 12 per litre by March 16 in order for fuel retailers to break even.

On Thursday, international crude oil prices surpassed USD 120 per barrel for the first time in nine years, before recovering slightly to USD 111 on Friday, widening the gap between cost and retail rates.

Market analysts are of view that, with international oil prices spiking in the last two months, state-owned fuel retailers "need a massive price hike of Rs 12.1 per litre on or before March 16, 2022, just to breakeven, and a price hike of Rs 15.1 is required after including margins for oil firms,"

According to data from the energy ministry's Petroleum Planning and Analysis Cell (PPAC), the basket of crude oil India buys jumped to USD 117.39 per barrel on March 3, the most since 2012. This compares to an average price of USD 81.5 per barrel for the Indian basket of crude oil when the price of petrol and diesel was frozen in early November last year.

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