Petrol in Delhi is currently priced at Rs 101.19 per liter and diesel at Rs 88.62 per liter.
Sources said the jump in international oil prices could translate into an increase in retail selling price of petrol and diesel in India as oil companies face extreme margin squeeze.
There has been no change in the prices of petrol and diesel for 12 days but now the jump in the international rate is adding to the pressure. The current prices of petrol and diesel in the international market are around $4-6 per barrel higher than the average prices during August. However, no increase in retail prices has been affected by the oil companies so far, the sources said.
He said that if international prices remain at this level, then oil marketing companies (OMCs) will have to increase the retail prices of petrol and diesel. The retail prices of petrol and diesel were last increased on July 17 and July 15, respectively.
Petrol in Delhi is currently priced at Rs 101.19 per liter and diesel at Rs 88.62 per liter. Average international crude oil prices fell by more than $3 a barrel in August compared to the previous month. This comes against the backdrop of mixed economic data from the US and China and mobility restrictions in Asia fueled by the rapidly spreading delta variant.
Accordingly, the retail prices of petrol and diesel in the Delhi market were reduced by Rs 0.65 per liter and Rs 1.25 per liter by the oil marketing companies with effect from July 18. Last fall was amended on September 5. However, with the latest developments in the international market, the crude oil prices have started rising steadily since the last week of August.
A fire on Mexico’s offshore platform has halted crude production in North America and disruptions caused by Hurricane Ida on the US Gulf Coast have driven oil prices up sharply. According to the IEA, Hurricane Ida, which hit the US Gulf Coast since Hurricanes Katrina and Rita in 2005, could result in the loss of up to 30 million barrels in total crude oil supplies.
Besides, a fall in US crude inventories and expectations of a recovery in demand have also contributed to the recent rally in prices. OPEC in its monthly oil market report for September has retained its forecast of 6.0 million barrels per day growth in world oil demand for 2021. According to OPEC, increased vaccination rates and steady economic growth in major economies are expected to support crude oil demand.
For Q4 2021, world oil demand is expected to increase by 1.24 million barrels per day from Q3 2021. For 2022, OPEC has forecast oil demand to reach 100.8 Mb/d, higher than pre-pandemic levels. Sources said with the IEA reporting an increase in vaccination rates and optimism about a possible improvement in the demand outlook, international oil prices may remain stable in the near term.
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