Global crude oil prices are once again moving towards the $100 per barrel mark. Rising tensions between the US and Iran and concerns over shipping through the Strait of Hormuz have pushed oil prices higher.
Brent crude recently moved close to $98 a barrel, raising concerns for countries like India that depend heavily on imported crude oil.
Higher crude prices mean higher costs for Indian oil companies. However, petrol and diesel prices have not increased again yet.
Petrol and diesel prices have remained unchanged since the last price revision in May. Oil companies are currently absorbing part of the higher costs through their margins and earnings from refining.
However, these margins are also coming under pressure. If crude prices remain near $100 for a longer period, oil companies may find it difficult to absorb the rising costs.
For now, motorists do not have to worry about an immediate nationwide price hike. But if the current situation continues, another increase in petrol and diesel prices could become difficult to avoid.
The key question is how long oil companies can absorb the higher crude costs before the impact reaches consumers.
