Premium petrol price hiked by Rs 2 a litre, bulk diesel up Rs 22 (No change in regular petrol, diesel rates), Pg1

Key Highlights:

• Prices for premium 95-octane petrol increased by Rs 2 per litre in Delhi, with corresponding hikes across India.
• Industrial diesel prices rose by approximately Rs 22 per litre in Delhi, reaching Rs 109.59.
• The Indian Rupee fell to a new record low of 93.77 per dollar due to the West Asia conflict.
• The RBI's foreign exchange reserves decreased by $11.7 billion on March 6, followed by another $7.1 billion drop by March 13.

Detailed Insights:

• The surge in international crude oil and fuel prices, triggered by the West Asia war, has burdened Indian public sector refiners and fuel retailers, leading to price adjustments.
• The Rupee's depreciation is attributed to the West Asia conflict, concerns about the impact of elevated fuel prices on India’s trade deficit, and foreign investors withdrawing from local financial markets.
• The RBI has been actively intervening in the foreign exchange market to manage the Rupee's volatility, selling $82 billion of foreign currency in the spot market during the last three months of 2025.
• The average price of India's crude oil basket has surged to $117.09 per barrel in March, significantly higher than the RBI's earlier assumption of $70 per barrel for the second half of 2025-26.

Key Concepts Involved:

• Trade Deficit: The amount by which the cost of a country's imports exceeds the value of its exports.
• Repo Rate: The rate at which the central bank (RBI) lends money to commercial banks against the security of government securities.
• Foreign Exchange Reserves: Assets held by a central bank in foreign currencies, used to back liabilities and influence monetary policy.