New Delhi, May 18 -- The retail fuel price hike of Rs 3 per litre has been implemented to reduce the losses incurred by oil marketing companies (OMCs) due to unchanged fuel prices amidst rising Brent Crude prices. While immediate consumer price inflation shows an upward movement, according to SBI Research Ecowrap, "there is no direct impact of this hike on the fiscal situation."

The report noted that fuel consumption levels typically recover quickly after an initial price change.

"Historical data shows that hike in petrol and diesel price has been followed by a decline in consumption immediately after the hike, only to recover thereafter with no decline visible in the annual consumption levels. Further, immediate impact on CPI inflation...