In the past 9 days, petrol and diesel prices have been cut almost every day on the back of benchmark Brent crude oil price which fell dramatically in last one month after touching a high of $71 per barrel. The total cut since February 7 in the petrol price has been 59 paise and diesel price 79 paise.
The petrol prices on February 15 in four major metro cities were: Delhi Rs 72.79; Kolkata Rs 75.49; Mumbai Rs 80.66; Chennai Rs 75.49, while diesel prices were: Delhi Rs 63.32; Kolkata Rs 65.98; Mumbai Rs 67.43; Chennai Rs 66.77. Meanwhile, the oil prices rose around at 1% due to weaker US dollar and Saudi Arabia’s comment to continue with production cuts.
The Brent crude oil prices were recorded $64.99 a barrel, up 63 cents, while US West Texas Intermediate (WTI) was up 83 cents to $61.43 a barrel. Although, fuel prices in India are not completely dependent on crude oil prices, but they get heavily influenced by international movements.
The petrol and diesel prices that were on a rising streak since the excise duty cut announced by the central government in October last year, began falling after February 7. Despite the cut in the past 9 days, the petrol price in Mumbai is still at Rs 80 a litre.
It was widely anticipated that the government will announce some relief in the Budget 2018, however, low fiscal space understood to have tied its hands. Earlier, the government had indicated that they could announce another excise duty cut if and when Brent crude oil price touched $75 a barrel.
However, after briefly crossing the $70 a barrel mark in January, the crude oil prices began fell as low as $62.5, while fluctuating yet staying below $65 a barrel. From June 16, to catch up with international trade practices, Indian oil companies too began daily revision of oil prices instead of on a gap of 15 days.
This, many believe, make the oil price revisions go unnoticed. In June 2010, the government deregulated the fuel prices in India and is now controlled by oil companies under the free market system.
Source: Financial Express