International oil prices have hit a seven-month low but there is no change in retail selling price of petrol and diesel in India as state-owned fuel retailers recoup losses incurred for holding rates for a record five months despite rising cost.

International benchmark Brent crude fell below USD 90 per barrel last week for the first time since early February as recession fears weigh on demand. It has since recovered and is trading at USD 92.84 per barrel, the lowest in six months.

Prices fell despite bullish developments, including Russia keeping the North Stream pipeline offline and producers cartel OPEC and its allies (OPEC+) cutting production.

But this has not led to any revision in retail petrol and diesel prices in India and they continue to be on freeze for a record-setting 158 days.

Responding to reporters' questions on no change in fuel prices, oil minister Hardeep Singh Puri had on Friday sought to link the no revision to losses state-owned fuel retailers incurred in keeping rates unchanged when international oil prices surged to multi-year high.

"When (international oil) prices were high, our (petrol and diesel) prices were already low," he had said. "Have we recouped all our losses?" he went on to ask.

He however did not elaborate on the losses incurred on keeping rates steady since April 6.

The basket of crude oil that India imports averaged USD 88 per barrel on September 8. It had averaged USD 102.97 in April, before rising to USD 109.51 in the following month and USD 116.01 in June. Prices started to fall in July when the Indian basket averaged USD 105.49 a barrel. It averaged USD 97.40 in August and USD 92.87 in September so far.

State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not exercised their right to adjust the retail selling price of petrol and diesel in line with the international costs for over five months now to help the government manage runaway inflation.

At one point, they were losing Rs 20-25 per litre on diesel and Rs 14-18 a litre on petrol as international oil prices soared. These losses have been trimmed with the fall in oil prices.

"There are no under-recovery (losses) on petrol now. For diesel, it will take some time to reach that level," an official said.

But this is unlikely to translate into an immediate reduction in rates as oil companies will be allowed to recoup losses they had accumulated on selling fuel at below cost in the last five months, another official said.

Puri had on Friday stated that international oil prices need to stay at USD 88 per barrel or fall below to bring some relief.

India is 85 per cent dependent on imports for meeting its oil needs and so retail pump rates are directly dependent on happenings in the global markets.

IOC, BPCL and HPCL are supposed to revise the retail price of petrol and diesel daily in line with cost. But they froze rates for a record 137 days beginning November 4, 2021, just as states like Uttar Pradesh went to polls.

That freeze ended on March 22 this year and rates went up by Rs 10 per litre each in just over a fortnight before a new freeze came into effect from April 7.

Petrol currently costs Rs 96.72 a litre and diesel Rs 89.62 in the national capital. This is down from Rs 105.41 a litre price on April 6 for petrol and Rs 96.67 a litre for diesel as the government cut excise duty to cool rates.

The Rs 10 a litre increase, effected between March 22 and April 6, wasn't sufficient to cover the cost and the new freeze meant accumulation of more losses, officials said.

Oil companies did not revise rates to help the government manage inflation which had already peaked to a multi-year high. It would have further spiked if petrol and diesel prices were increased in line with cost.

The freeze meant that the three retailers posted a combined net loss of Rs 18,480 crore in June quarter.

Petrol was deregulated in June 2010 and diesel in November 2014. Since then, the government does not pay oil firms any subsidy to compensate them for losses they might incur on selling fuel at rates below cost.

So, the oil companies recoup losses when input costs fall, the first official explained.

Russia's February 24 invasion of Ukraine sent shock waves through global energy markets. Initial price spikes turned into lingering price rises as the global community imposed sanctions on Russia's key exports. Brent was at USD 90.21 per barrel before the invasion and rose to a 14-year high of USD 140 on March 6.

Some of the heat has come out of oil markets in recent weeks on fears of a recession snipping away demand. China has seen crude oil imports fall 9 per cent last month as the country's zero-Covid policy has led to full or partial lockdowns in more than 70 cities since late August.