Crude Oil Spikes Globally, Indian Retail Fuel Prices Constant... For Now!
Amid reports of the global supply chain of crude oil facing pressure, it is likely that petrol-diesel prices in India will also be affected. Due to inklings of a possible war between Russia and Ukraine which will also involve the US-led N.A.T.O alliance, the global prices of crude oil are at their highest point in seven years, and this is expected to rise even further in the near future. Brent Crude touched $90 a barrel today.
This jump in global crude oil prices may not immediately reflect in the retail fuel prices in India, given that the Budget session and Assembly elections in five states are due shortly, but it is expected to affect the government’s coffers, along with the apprehension that after the Budget and elections are done, the Union government may hike these prices again to make up for the loss.
The international crude oil benchmark Brent Crude went past the $90/barrel mark for the first time since 2014. In October 2014, crude oil prices were $86.08/barrel, which has increased by 2% now. At the time of writing, crude oil is trading at $90.76.
What is significant is that the Budget session of Parliament will commence from January 31st, and the Budget will be presented on February 1st. As per the Ministry of Oil, India imported $82.4 billion worth of crude oil in the 9 months between April and December, 2021, which is 108% more than the imports during the same period in the year 2020 which came to $39.6 billion. However, in terms of volume, the importof 156 mt. was only 9% more than 2020’s imports, but the country had to pay a high price for that.
India imports more than 80% of its crude oil needs, which will cross the $100 billion mark by the end of March. In the last financial year 2020-21, India’s import bill for crude oil stood at $62.2. billion, which is now expected to double because of the increase in crude prices.
For now, despite the hike in crude oil prices globally, the rate of petrol and diesel in the national capital Delhi continue to remain at ₹95.41 and ₹86.67. In October 2021,prices of petrol and diesel had touched a high point of ₹110 and ₹100 respectively, whereas at the same time, global crude oil prices hit the maximum of $83.54.
Now it can be seen that domestic fuel prices are constant despite an uptick in crude oil prices globally, and therefore it is clear that retail fuel prices are in the hands of the government and from its point of view it is a hen that lays golden eggs.
The international crude oil benchmark Brent Crude went past the $90/barrel mark for the first time since 2014. In October 2014, crude oil prices were $86.08/barrel, which has increased by 2% now. At the time of writing, crude oil is trading at $90.76.
What is significant is that the Budget session of Parliament will commence from January 31st, and the Budget will be presented on February 1st. As per the Ministry of Oil, India imported $82.4 billion worth of crude oil in the 9 months between April and December, 2021, which is 108% more than the imports during the same period in the year 2020 which came to $39.6 billion. However, in terms of volume, the importof 156 mt. was only 9% more than 2020’s imports, but the country had to pay a high price for that.
India imports more than 80% of its crude oil needs, which will cross the $100 billion mark by the end of March. In the last financial year 2020-21, India’s import bill for crude oil stood at $62.2. billion, which is now expected to double because of the increase in crude prices.
For now, despite the hike in crude oil prices globally, the rate of petrol and diesel in the national capital Delhi continue to remain at ₹95.41 and ₹86.67. In October 2021,prices of petrol and diesel had touched a high point of ₹110 and ₹100 respectively, whereas at the same time, global crude oil prices hit the maximum of $83.54.
Now it can be seen that domestic fuel prices are constant despite an uptick in crude oil prices globally, and therefore it is clear that retail fuel prices are in the hands of the government and from its point of view it is a hen that lays golden eggs.
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