Petrol, Diesel Price Latest Update: The petrol, diesel price freeze is likely to be extended in India for some more days after international oil prices rose on the announcement of deep production cuts by the OPEC.Also Read – Biden Vows 'Consequences' for Saudis After OPEC+ Cuts Output
The development comes after some of the world’s top oil-producing countries agreed to slash production by two million barrels per day to spur recovery in oil prices that had dropped to pre-Ukraine war levels. Also Read – Rs 2/ltr Additional Excise Duty On Petrol, Diesel Deferred I Deets Here
However, it is a bad news for India as a fall in oil prices in recent weeks had helped it cut down on its import bill as well as limit losses that state-owned fuel retailers were incurring on selling petrol and diesel. Also Read – Petrol, Diesel Price Hiked in Meghalaya; Check Latest Rates Here
Before the decision of OPEC, massive losses on diesel had come down to about Rs 5 per litre from a peak of around Rs 30 a litre while oil companies had started making a small profit on petrol.
However, the rise in prices of crude oil and the weakening of the rupee against the US dollar would mean losses on diesel widen and margins on petrol erode, industry experts told Live Mint.
It must be noted that India imports 85 per cent of its oil needs and international oil prices directly dictate domestic pricing.
In the meantime, some of the state-owned fuel retailers — Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — have changed the retail selling price of petrol and diesel in line with the international costs for a record six months now to help the government manage runaway inflation.
This prize freeze led to the firms booking losses on fuel sales as oil prices rose to a multi-year high of around USD 120 per barrel during May/June. Prices had started to ease in August and dropped to January levels last month.
In the wake of these development, the oil firms across India were hoping to recoup the losses they had booked since April if the declining trend was to continue but the reversal means they are back to square one.
On the other hand, IOC, BPCL and HPCL are supposed to revise the retail price of petrol and diesel daily in line with cost. However, these firms froze rates for a record 137 days beginning November 4, 2021, just as states like Uttar Pradesh went to polls.
And the freeze ended on March 22 this year and rates went up by Rs 10 per litre each in just over a fortnight before a new freeze came into effect from April 7.
At present, petrol costs Rs 96.72 a litre and diesel Rs 89.62 in the national capital. Notably, the rice is down from Rs 105.41 a litre price on April 6 for petrol and Rs 96.67 a litre for diesel as the government cut excise duty to cool rates.