Fuel prices are set to rise sharply again after falling or staying stable for a month as international rates have jumped and the rupee weakened.
State-owned oilNSE -0.57 % companies have kept rates of petrol and diesel unchanged for six days although global crude oil prices have increased about $3 a barrel during this period.
Since June 21, crude oil has gained more than $6 to reach $79.5 a barrel as the United States is seeking stronger compliance of its sanctions against Iran that traders fear could substantially reduce oil supply from the market.
The decision of a cartel of key oil-producing countries to raise output by a million barrels per day is seen as insufficient to meet the rising demand, and has aided the recent surge in prices.
Crude oil prices have stayed high this year owing to factors such as robust demand, an artificial supply restriction by key oil-producing countries led by Saudi Arabia and Russia, and a sharp drop in Venezuela’s output.
A weaker rupee, along with zooming oil prices, has begun to hurt Indian economy and consumers. The rupee last week fell to a record low of more than 69 to a dollar. India’s import bill is set to balloon as the country imports nearly 83% of its crude oil requirement.
Since June 26, the price of petrol has been constant at Rs 75.55 and that of diesel at Rs 67.38 a litre in Delhi. Similarly, in Mumbai, the petrol price has been unchanged at Rs 82.94 and that of diesel at Rs 71.49 per litre.
State-owned oil companies determine local prices of petrol and diesel using international fuel rates and the currency movements. International prices of petrol and diesel follow the crude oil trajectory, albeit with some lag.
The price of petrol in Delhi has fallen Rs 2.88 per litre since May 29. The price of diesel is down Rs 1.93 per litre since May 29, after which prices started declining.
Indian Oil Corporation’s website, a key source of pricing information for petrol and diesel prices, has changed the way it publishes fuel prices, making it slightly difficult for people to know fuel rates. It has also stopped publishing historical price data for all previous years.
Source: economictimes.indiatimes.com