Fuel prices hiked soon after attack on Saudi crude facilities

New Delhi: Petrol and diesel prices saw the biggest hike in the country since July 5 Budget in the wake of the recent attacks on Saudi Arabian crude oil facilities.

Petrol price was increased by 14 paise per litre to Rs 72.17 and diesel by 15 paise to Rs 65.58 per litre in the national capital. This is the biggest single-day hike since the July 5 maiden Budget of Finance Minister Nirmala Sitharaman that raised rates by almost Rs 2.50 a litre to account for the increase in excise duty on fuel.

International oil prices reported a 20 per cent surge – the biggest in almost 30 years. The market remains on tenterhooks over the threat of a military response to the attacks.

The Iranian-backed Houthis, who hold Yemen's capital, Sanaa, and other territories in the Arab world's poorest country, took responsibility for the attacks in the war against a Saudi-led coalition that has fought since 2015 to reinstate the internationally recognized Yemeni government.

Yemen's Iran-aligned Houthi group on Saturday attacked two Saudi Aramco plants, including the world's biggest oil processing facility, sparking fires in the latest flare-up of violence in the Gulf.

The attacks were the latest of many drone-assaults on the kingdom's oil infrastructure in recent weeks, but easily the most damaging, halting about half of the supplies from the world's largest exporter of oil.

The Houthis hit Shaybah oilfield last month and two oil pumping stations in May. Both attacks caused fires but did not disrupt production. The coalition has responded with airstrikes on Houthi targets in Sanaa and other areas held by the group, which controls most large urban centres in Yemen.

Tensions in the region escalated in recent months after President Donald Trump pulled the United States out of a 2018 landmark international nuclear deal and extended economic sanctions on Iran.

The violence is complicating UN-led peace efforts to ease tensions between the Houthis and Saudi Arabia to pave the way for political talks to end the war, which has killed tens of thousands of people and pushed millions to the brink of famine. The Yemen conflict is widely seen as a proxy war between Saudi Arabia and Iran.

Oil Minister Dharmendra Pradhan said India, the world's third-largest oil consumer, is keeping a close watch on the developing situation.

"Certainly when there is a spike in prices, it creates anxiety," he told reporters here. "The events since Saturday (when the Saudi oil facilities were attacked) are a matter of concerns to us."

He, however, said that oil supplies from Saudi Arabia, India's second-biggest source, have not been disrupted.

"We have uplifted more than half of the contracted quantity for September. We uplifted oil (from Saudi Arabia) yesterday (September 16) and even today (September 17)," he said.

India imports 83 per cent of its oil needs. Saudi Arabia is its second-biggest supplier after Iraq. It sold 40.33 million tonnes of crude oil to India in 2018-19 fiscal, when the country had imported 207.3 million tonnes of oil.

China, South Korea, Japan and India are the biggest takers of the Saudi oil in Asia, with China and Japan leading the pack at an average of 900-1,100 kilo barrels per day each. India could be most exposed as its reserves are the least.

(With inputs from PTI)