New Delhi

State-owned fuel retailers are losing Rs 5 per litre on petrol and Rs 23 a litre on diesel as fresh hostilities in West Asia pushed international oil prices above $100 per barrel, the highest since last July, analysts said on Wednesday.

Brent crude, the international benchmark for oil prices, rose 2.5 per cent to over $100 a barrel, while US West Texas Intermediate crude gained almost 2 per cent to about $95. This after tensions rose in the Middle East amid the latest tit-for-tat exchange of fire between the US and Iran.

Brent last touched the $100-mark on July 23. India, the world's third-largest oil importing and consuming country, is particularly exposed to swings in international crude prices. It imports over 88 per cent of its crude - raw material for making fuels like petrol and diesel - requirements.

A sustained increase in prices raises the country's dollar-denominated import bill and can put pressure on the trade balance and the rupee, analysts said. Also, with retail pump rates remaining unchanged, it leads to fuel retailers incurring losses on sale of petrol, diesel and cooking gas LPG.

Prashant Vasisht, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Ltd, said with escalation in hostilities between Iran and the US, Brent prices have crossed the $100 per barrel-mark on Wednesday and the Indian crude basket is at about $109 per barrel.

"At the average price for the month of September till date, marketing margins on petrol are negative Rs 5 per litre and diesel at negative Rs 23 a litre and under recoveries on domestic LPG are at Rs 200 per cylinder," he said.

"If the current geo-political situation persists, crude oil prices could rise further given that several countries, including China, were tapping their strategic reserves for a significant proportion of their consumption and their return to the market could increase demand in a period of restricted supplies."

Higher crude prices can also feed into domestic inflation through fuel, transport and other energy-related costs.

But the impact on consumers and the wider economy would depend in part on how much of the increase is passed through to domestic fuel prices and how long international prices remain elevated.

For now, retail petrol and diesel prices remain on freeze for over three months. Rates were last revised on May 25 when they were hiked Rs 2.61 a litre for petrol and Rs 2.71 per litre for diesel. Those hikes were part of the revision in rates that happened in the second half of May in response to international prices rising due to the war in West Asia disrupting energy flows from the Gulf countries. In all, petrol price was raised Rs 7.35 a litre and diesel by Rs 7.53 in four instalments. India's crude oil import bill surged over 56 per cent during April-July to $63.4 billion compared to $40.5 billion in the same period last year, according to the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC).

The volumes bought remained almost the same -- 81.9 million tonnes in the first five months of the current fiscal year and 81.5 million tonnes last year.

The basket of crude oil India imports averaged $108.91 per barrel on September 8, according to PPAC.

The basket is made up of sweet or low-sulphur (Brent) and sour grades containing more than 0.5 per cent sulphur (Oman & Dubai average) in the ratio 77.81:22.19.

The Indian basket of crude oil breached the $100 mark earlier this month, and the September average is $102.11 per barrel against $90.19 in August and $82.04 in July.

Rajeev Sharan, Head of Research, Brickwork Ratings, said Brent crude has crossed $100 a barrel again, the highest since late July, driven mainly by US-Iran tensions and supply worries around the Strait of Hormuz rather than by stronger demand.