Crude oil has lost almost a third in value since early October because of an emerging supply glut following a global surge in production, including from the US, Russia, and OPEC
New Delhi: Petrol, diesel prices were cut for the ninth straight day on Friday, which is at its lowest level since July 2018 in Delhi. Petrol became cheaper by 37-40 paise in all major cities while diesel prices came down by 40-45 paise per litre, after today’s cut.
According to the Indian Oil Corp data, petrol prices in New Delhi, Kolkata and Chennai were at Rs 72.87 per litre, Rs 74.88 per litre and Rs 75.62 per litre, respectively, while diesel stood at Rs 67.72 a litre in New Delhi, Rs 69.57 a litre in Kolkata and Rs 71.52 a litre in Chennai.
Petrol prices have declined by more than Rs 9.86 per litre and diesel by Rs 8.46 per litre in a little over a month in Mumbai on softer international rates. In New Delhi, the prices have fallen Rs. 9.59 per litre for petrol and Rs 7.56 per litre for diesel since October 17.
According to current country’s pricing mechanism, domestic fuel prices depend on international fuel prices on a 15-day average, besides the value of the rupee. Global crude oil prices, on the other hand, have lost nearly 30 percent from the peak of $86.70 a barrel hit on October 3.
Petrol and diesel prices rallied from mid-August to October 4. Days after the government’s intervention to lower prices, crude oil rates also began to decline. Just last month, the forecast for crude oil was $100 a barrel and now the outlook has been halved to $50. US WTI crude futures were trading below $52 per barrel while Brent crude futures were above $60 per barrel.
The exchange rate of rupee, which was then trading above 74 against the US dollar, is also now trading below 71. A stronger rupee makes oil imports cheaper for India.
(With agency inputs)
Read Exclusive COVID-19 Coronavirus News updates, at MyNation.