Fuel prices see another hike as crude rises above $80/barrel
(Sourced from PTI)
Petrol price on Tuesday was hiked by 20 paise per liter and diesel by 25 paise as international oil prices crossed the $80 per barrel mark for the first time in three years. The price of petrol was hiked to Rs. 101.39 a liter in Delhi and to Rs. 107.47 per liter in Mumbai, according to price notification of state-owned fuel retailers.
Diesel rates went to Rs. 89.57 a liter in Delhi and Rs. 97.21 in Mumbai. This is the first price increase in petrol in more than two months and the fourth in case of diesel. The increase followed international oil prices rising for the fifth consecutive day and global benchmark Brent crude shooting past the $80 per barrel mark.
Tuesday was the first increase in petrol price since state-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) on September 24 resumed daily price revisions, ending the pause in rates that had effected since September 5. In four price increases since September 24, diesel rates have gone up by 95 paise per liter.
International crude oil prices have reached a nearly three-year high as global output disruptions have forced energy companies to draw more crude oil out of their stockpiles. Accordingly, US crude oil inventory levels are also nearing a three-year low. "Global demand for crude oil has been increasing consistently with the easing of pandemic restrictions and improving vaccination rates," a source said.
"On the supply side, (Organization of the Petroleum Exporting Countries) OPEC+ alliance has been slow in easing output restrictions, contributing to the tightened supply in the market," the source added. Additionally, hurricanes Ida and Nicholas have impacted crude oil production in the US Gulf of Mexico region, when they hit in late August and September, respectively.
As per both IEA and OPEC, global demand is expected to outpace supply due to which international oil prices will likely remain firm in the near to mid-term. A simultaneous rally in natural gas is also likely to drive demand for alternate fuels. When international oil rates fell in July and August, retail prices of petrol and diesel in the Delhi market were reduced.
The price hike between May 4 and July 17 pushed petrol prices above the Rs. 100-a-litre mark in more than half of the country, while diesel crossed that level in at least three states. India is dependent on imports to meet nearly 85 percent of its oil needs and so benchmarks local fuel rates to international oil prices.