Crude Oil Prices at Seven-Year High: Petrol and diesel prices in India are likely to see another rise after months as crude oil prices in the global scenario are at their seven-year high at the time. Crude oil prices have increased to over $88 per barrel, according to reports, amid a host of events. Brent crude futures rose 87 cents, or 1 per cent, to $88.38 a barrel at 0543 GMT, adding to a 1.2 per cent jump in the previous session Amid general inflation, this may also give a boost to oil prices in India, especially petrol and diesel, which have remained stable since November last year after the government cut the excise duty on these auto fuels.
Crude oil prices have been on fire since the beginning of the new year, rising by over 25 per cent in the last four weeks, as per reports. On December 1, the price of one barrel of Brent crude oil was around $69. Oil prices have been rising for four weeks now, its longest streak since October. This was due to an outage on a pipeline from Iraq to Turkey increased concerns about an already tight supply outlook amid worrisome geopolitical troubles in Russia and the United Arab Emirates, according to Reuters.
Petrol and diesel prices heavily depend on the price of international crude oil prices. The rates of fuel in all countries, including India, are calculated on the basis of crude oil prices — which is the main source of petrol and diesel. Fuel prices in the country are currently fairly high despite the government’s move to reduce the excise duty. In Delhi, petrol was retailing at Rs 95.41 on Wednesday, while diesel price was fixed at Rs 86.67 per litre. Before the price reduction, Delhi petrol price was well over Rs 100 till November 2021.
India’s economic balance has gone through a change with the relentless hikes in oil prices. For example, the prices of daily commodities have gone up significantly due to their transportation cost, which has in turn given a rise to inflation. This has already made the general citizens land in a host of problems, and with the rise in crude oil prices, this is likely to increase.
As an added effect, the price of air fuel has already risen in India. On Sunday, Aviation turbine fuel (ATF) was hiked by 4.2 per cent or Rs 3,232.87 per kilolitre by the oil marketing companies. This was the second time ATF price was hiked in January itself.
With all this, one must keep in mind that the Budget session is nearing. The 256th Budget will be presented by finance minister Nirmala Sitharaman on February 1 before the Parliament, which as a major influence on fuel prices. However, according to reports, the government might keep the fuel rates stable in view of the upcoming Assembly election in five states including Uttar Pradesh and Punjab.
OPEC officials have told Reuters that oil’s rally may continue in the next few months due to recovering demand and limited capacity in OPEC+, and prices could break $100 a barrel.
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