Fuel rates remained stable in various cities of the country including the national capital Delhi, metro cities Mumbai, Kolkata and Chennai on Monday as there was no change in the prices of petrol and diesel.
Currently, the price of 1 liter of petrol in Delhi is 103.97 and on diesel 86.67 per liter. Meanwhile, the prices of petrol and diesel remained stable in the country’s financial capital. 109.98/Litre and 94.14 per liter respectively.
For Kolkata and Chennai, petrol and diesel price 104.67 more 89.79 more 101.40 more 91.43 in Chennai respectively. Prices vary from state to state, depending on local taxes and the cost of transportation.
Petrol and diesel prices in India are likely to be lower and may become cheaper if the global crude oil price continues to fall further. According to sources in the Government of India (GoI), fuel prices in India can be reduced only if there is a further reduction in global oil prices. Official sources told PTI that petrol, diesel prices in the retail domestic market are fixed on a rolling average of 15 days. Therefore, if the global oil price continues to fall further, the 15-day rolling average will automatically come down, thereby reducing the prices of petrol, diesel in India’s retail domestic market.
Meanwhile, global benchmark Brent crude oil prices remained broadly in the range of around $80-82 per barrel, the level they held from November to November 25.
On Friday, 26 November, prices fell to around USD 4 per barrel by Asian timestamp. However, after the opening of the US market later, coupled with heavy selling in Brent futures, prices at ICE London fell by around US$6 to close at US$72.91 a barrel.
Sources said, this seems like a knee-jerk reaction to the fear that the new COVID-19 variant discovered in southern Africa could stifle economic growth and lead to another demand slump.
State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) revise petrol and diesel prices on a daily basis.
But this revision is based on the average benchmark international fuel rate in the last fortnight. Therefore, on Sunday the price is determined by the average of the last 15 days.
“The natural expectation from a fall in rates on Friday is that retail pump rates will also come down. But this is not the case with retail rates. Since international oil prices are confined for most of November, the fall on Friday when outside the average would have been There is no significant change with the last fortnight.
“Only when the fall in rates continues for a few more days, we will see a reduction in retail petrol and diesel prices,” a source said.
The reason why 15 days rolling average is taken to fix prices is to protect domestic consumers from extreme volatility in international prices. If day rates are taken to decide prices, it will result in huge fluctuations in pump prices every day, he explained.
However, renewed Covid-19 concerns have now brought about the desired objective.
The oil-producing cartel, OPEC, may still have a say in it, with the group meeting scheduled for December 1-2, potentially leading to a reduction in the production target for 2022.
Thus, international crude oil prices may recover again if OPEC announces a slower production rollout than expected, sources said.
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