In welcome news, the state-controlled oil marketing companies on Thursday left prices of retail petrol and diesel unchanged for the second consecutive day after a sharp increase on Tuesday, the sixth day of price revision. In national capital Delhi, the price of petrol was Rs 71.27 a litre. Diesel was being sold at Rs 65.90 a litre. In financial capital Mumbai, petrol and diesel prices were at Rs 76.90 a litre and Rs 69.01 per litre, respectively. A litre of petrol in Kolkata cost Rs 73.36, while diesel cost Rs 67.68 a litre. In Chennai, prices of petrol and diesel were Rs 73.99 and Rs 69.62 a litre, respectively.
In Noida, prices of petrol and diesel were Rs 70.97 and Rs 65.06 a litre, respectively. A litre of petrol in Gurugram cost Rs 71.99, while diesel cost Rs 65.67 a litre. In Faridabad, prices of petrol and diesel were Rs 72.21 and Rs 65.89 a litre, respectively.
On Wednesday, in the international oil market, crude prices stabilised after sharp drops in the earlier session, when markets were dragged down amid growing concerns about an economic slowdown. International Brent crude oil futures were trading at $61.58 per barrel, up 8 cents, or 0.1 per cent, from their last close.
Ever Saudi Arabia has decided to cut down on oil production, global crude oil has been gaining momentum. It may be noted that major OPEC and non-OPEC oil-producing countries collectively decided to cut down oil production after its value fell almost 30 per cent due to overproduction.
Prior to an increase in prices on January 7, rates had cooled to a year’s low of Rs 68.29 for petrol and Rs 62.16 in case of diesel. This followed a decline in rates on almost all days since October 18, 2018. In all, the petrol price has fallen by Rs 14.54 per litre since October 18, 2018, while diesel price declined by Rs 13.53 per litre in two-and-a-half months.
If the last three months are considered, then the price of petrol has fallen by about Rs 12 or about 15%. International benchmark Brent crude oil, which is now trading close to the $60 per barrel mark, has lost about 25% of its value during the corresponding period.
The recent fall in the value of rupee against the US dollar has offset gains from the falling crude oil prices. The rupee has fallen over 3 per cent in the last few days. The crude prices have fallen by over 30 per cent since early October last year when it was at $86 per barrel, making a forecast of $100 crude by January look true.
The twin factors, therefore, have brought down retail fuel rates to two-month low. Retail fuel prices in India depend on both international oil price and the rupee-dollar exchange rate. Also, the pump price of petrol and diesel is dependent on the global rates of benchmark fuel and the rupee-US dollar exchange rate.