Why Petrol prices are likely to rise further
New Delhi, Sep 28: Petrol price today was hiked by 20 paise per litre and diesel by 25 paise as international oil prices neared USD 80 per barrel mark for the first time in three years, said a PTI report.
The price of petrol was hiked to ₹ 101.39 a litre in Delhi from ₹ 101.19 and to ₹ 107.47 per litre in Mumbai, according to a price notification of state-owned fuel retailers.
Diesel rates went to ₹ 89.57 a litre in Delhi and ₹ 97.21 in Mumbai.
Prices differ from state to state depending on the incidence of local taxes.
This is the first price increase in petrol in more than two months and the fourth in case of diesel.
The increase followed international oil prices rising for the fifth consecutive day and global benchmark Brent heading for USD 80 per barrel.
Tuesday was the first increase in petrol price since state-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) on September 24 resumed daily price revisions, ending the pause in rates that had effected since September 5.
In four price increases since September 24, diesel rates have gone up by 95 paise per litre. This negates three-fourths of the ₹ 1.25 a litre cut in prices that happened between July 18 and September 5.
Before
this,
diesel
price
was
last
increased
on
July
15.
The
last
increase
in
petrol
rate
was
on
July
17.
International
crude
oil
prices
have
reached
a
nearly
three-year
high
as
global
output
disruptions
have
forced
energy
companies
to
draw
more
crude
oil
out
of
their
stockpiles.
Accordingly, US crude oil inventory levels are also nearing a three-year low.
"Global demand for crude oil has been increasing consistently with the easing of pandemic restrictions and improving vaccination rates. On the supply side, OPEC alliance has been slow in easing output restrictions, contributing to the tightened supply in the market," a source told news agency Press Trust of India.
Additionally, hurricanes Ida and Nicholas have impacted crude oil production in the US Gulf of Mexico region, when they hit in late August and September, respectively.
As per both IEA and OPEC, global demand is expected to outpace supply due to which international oil prices will likely remain firm in the near to mid-term. A simultaneous rally in natural gas is also likely to drive demand for alternate fuels.
When international oil rates fell in July and August, retail prices of petrol and diesel in the Delhi market were reduced by ₹ 0.65 and ₹ 1.25 per litre.
Prior to that, the petrol price was increased by ₹ 11.44 a litre between May 4 and July 17. Diesel rate had gone up by ₹ 9.14 during this period.
The price hike during this period pushed petrol prices above the ₹ 100-a-litre mark in more than half of the country, while diesel crossed that level in at least three states.
India is dependent on imports to meet nearly 85 per cent of its oil needs and so benchmarks local fuel rates to international oil prices.
(PTI)