With Crude oil prices touching its seven year high, petrol and diesel consumers in India are going to get a big shock once the assembly Election Process is over next month, feels experts of the Oil Industry.
If analysts of the petroleum sectors are to be believed, Oil Marketing Companies might drop a ‘petrol bomb’ on consumers increasing petrol and diesel prices by Rs 5 to Rs 6 a litre in the coming months.
One look at the past six months record reveals that crude oil prices in the International market have increased by almost 34 % in the past seven months—from the average price of USD 66.80 per barrel in the month of August to USD 95.6 per barrel in February.
According to a rough estimate, an increase of one USD per barrel leads to an increase of Rs 0.50 a litre. The same trend is visible in the neighbouring countries as well. It was only yesterday that Pakistan increased its petrol and diesel prices by Rs 12 a litre taking the fuel prices as high as Rs (Pakistani Rupiya) 159 a litre in some parts of Pakistan. Even the domestic LPG cylinder price in Pakistan has also touched Rs 2390 per cylinder as against Rs 899 per cylinder in India.
However, Prices in India would remain somewhat stabilized till the second week of next month due to ongoing assembly elections in five states since 90% of the retail sale of petroleum products is controlled by the government owned Oil Marketing Companies.
“The prices are highly volatile because of ongoing Russia-Ukraine tension. If the tension escalates further, the price increase would be much more in the coming months for petrol, diesel as well as natural gas,” said a senior officer of an Oil Marketing Company requesting anonymity.
He further admitted that the fuel price hike is imminent until the International crude oil price did not come down to USD 70 a barrel level. In November the Union Government had reduced the excise duty to bring down the petrol prices, but it made little impact due to the recent surge in crude oil prices in the international market, the officer pointed out.