Petrol and diesel prices today — Aug 16: Latest fuel rates in Delhi, Mumbai, Bengaluru amid US-Iran deadlock on Hormuz

Petrol and diesel prices today, 16 August: Fuel rates held steady across major Indian cities on Sunday, 16 August, even as crude oil price rose more than $1 a barrel on Friday. While oil and gas prices are poised for sizeable weekly gains, the global benchmark Brent crude oil settled 1.67% higher at $88.52 a barrel on Friday. Crude oil price rose almost 6% this week amid the deadlock in peace talks, blocking efforts to end almost six months of war, Bloomberg reported.

Check petrol and diesel prices in your city on 16 August

US-Iran war update

As the Islamic Republic and Oman deliberate on finalizing a deal on how the Strait of Hormuz should be managed along the route linking the Persian Gulf to the Gulf of Oman and the Arabian Sea, attacks on ships navigating through the waterway continue. US President Donald Trump threatened Iran of economic consequences in a speech on Long Island on Friday as he emphasized that US blockade of Iranian ports was a “wall of steel” which enabled Washington to effectively govern Hormuz.

As markets monitor tense US-Iran talks, Iranian Foreign Minister Abbas Araghchi on his Telegram channel on Saturday said an agreement with Oman wouldn’t translate into the strait’s reopening.

Mediators from Qatar and Pakistan continue to pass messages between Tehran and Washington, but Abbas Araghchi contented that “this does not constitute negotiation. We have not yet made a decision to resume negotiations with the US,” he added. Araghchi said deal "depends on fulfilling other conditions that the US must abide by for it to take place."

Govt cuts export levies on diesel, ATF; scraps petrol duty

The central government recently revised export levies on petroleum products and lowered windfall taxes on exports of petrol, diesel and aviation turbine fuel. This fuel price adjustment came into effect on Saturday which is a part of the government's fortnightly review of export levies on petroleum products. Re-introduced in March against the backdrop of US-Iran war, the latest revision follows the previous adjustment made on 3 August.

The notification issued by the Ministry of Finance's Department of Revenue on Friday slashed duty on diesel exports to ₹24 per litre from ₹25.5. For the 15-31 August fortnight, the Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) on petrol exports was set at zero per litre while the tax on aviation turbine fuel was adjusted to ₹19.5 per litre from ₹22 rupees earlier. These levies were introduced to ensure domestic availability of petrol, diesel and ATF by discouraging exports due to heightened uncertainty in global energy markets.

What will happen if India's Russian crude purchase falls by 50 per cent?

Economist and former UN advisor Santosh Mehrotra answered one the most critical question on India's import of Russian crude amid ongoing trade negotiations with the US. This statement comes after Washington proposed Russia sanction bill which allows tariffs of up to 100 per cent on major buyers of Russian energy. According to Santosh Mehrotra, India's annual oil import bill could rise by $5-10 billion if the country reduces its purchases of Russian crude by 50 per cent, ANI reported. In the interview, the economist warned against inflationary pressure, mounting stress on rupee and current account deficit.

He highlighted India's high dependence on Russian crude and the discounted prices offered by Moscow which have helped contain the country's oil import costs and said, “In today's date, we have to keep in mind that our dependence on Russia is about 50 per cent for the oil supply.”

Suggesting that a reduction in Russian oil purchase could increase inflation by around 0.3 percentage point, he said, “If we have to reduce our purchases from Russia by 50 per cent, then it will have an impact on the oil import bill of 5-10 billion dollars for the entire year.”

He cautioned against higher oil import costs could which could put pressure on the external account citing current account deficit of 0.6-0.7 per cent of GDP in recent years. He further warned against far reaching consequences of any disruption to Russian oil supplies in the international market that could push global crude prices higher.