Petrol, diesel price begin to climb after crude oil’s record jump

Petrol, diesel price begin to climb after crude oil’s record jump

 

As was being feared, petrol and diesel prices began to increase in India today following a massive spike in crude oilrates due to drone attacks on Saudi Arabia’s oil facilities. The price of petrol increased by 18 paise and that of diesel by 33 paise.

A litre of petrol costs ₹77.21 in Delhi, ₹77.83 in Mumbai, ₹76.69 in Hyderabad, ₹74.61 in Bengaluru and ₹74.97 in Chennai. Similarly, diesel costs ₹65.61 in Delhi, ₹68.76 in Mumbai, ₹71.46 in Hyderabad, ₹67.79 in Bengaluru and ₹69.29 in Chennai.

HPCL chairman M K Surana had yesterday said the price of petrol and diesel at retail outlets might go up if the price of crude stays at current levels.

State-run oil retailers fix the price of petrol and diesel at retail outlets based on an average of last 15 days of benchmark price of petrol and diesel along with the exchange rate of rupee against the dollar. Since India imports about 70% its crude oil requirements, an expensive dollar makes crude oil costlier for India.

Tracking emerging market currencies, the Indian rupee was trading weaker against the US dollar. The domestic currency was trading at 71.81 a dollar, down 0.32% from its Monday’s close of 71.60. The rupee has weakened 2.8% so far this year.

Brent futures in London had leaped yesterday to a record $12 a barrel, before settling just above $69 for the biggest one-day percentage gain since the contract began trading in 1988. On the New York Mercantile Exchange, West Texas Intermediate futures jumped 15% to $62.90, the most since 2008.

In a report, Kotak Institutional Equities has said that the price of diesel and petrol may go up by ₹5-6 per litre. “We do not rule out a possibility of moderation in marketing margins on auto fuels—a $10/bbl rise in global crude and product prices may require OMCs to increase retail price of diesel and gasoline by ₹5-6/liter in the following fortnight,” Kotak said.

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