In a first, petrol prices crossed the ₹100 mark in the national capital, as state run fuel retailers raised transportation fuel prices again on Wednesday.
With petrol and diesel prices increased by 35 paise per litre and 17 paise per litre, respectively, they were retailing at ₹100.21 per litre and ₹89.59 per litre, respectively in Delhi at Indian Oil Corporation Ltd’s outlets. Diesel and petrol prices have already breached the ₹100 mark in several parts of India.
Petrol prices have also crossed ₹100 mark in all major metros, with the fuel selling at ₹100.23 per litre in Kolkata after the Wednesday price increase. Fuel prices have been hiked for the 36th time since the results for the assembly elections in West Bengal, Assam, Kerala, Tamil Nadu, and Puducherry were announced on 2 May. Petrol and diesel prices have increased by ₹9.81 per litre and ₹8.8 per litre, respectively since then.
This comes against the backdrop of Organisation of the Petroleum Exporting Countries plus (Opec+) grouping being unable to reach an agreement on oil production with the differences between Saudi Arabia and United Arab Emirates.
“The 18th Opec and non-Opec Ministerial Meeting has been called off,” Opec secretary general, Mohammad Sanusi Barkindo, said in a letter to Heads of Delegation of Opec member countries and non-Opec oil producing countries participating in the Declaration of Cooperation (DoC), according to a statement.
This assumes importance given that the Opec grouping accounts for a major part of India’s crude oil imports and around 40% of global production. The Opec+ arrangement comprising 23 countries including Russia and allies have cut production, resulting in a global rally in crude oil prices. India, the world’s third largest oil importer, has been flagging its concerns over the increasing global crude oil prices and requesting the phasing out production cuts to Opec.
Brent was trading at $75.04 per barrel, while West Texas Intermediate traded at $73.92 a barrel at the time of writing this story. The cost of the Indian basket of crude, which comprises Oman, Dubai, and Brent crude, stood at $75.97 a barrel on 6 July.
India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and widen trade deficit. Following the covid outbreak, crude prices for the Indian basket of oil had plunged to $19.9 in April last year during the first wave before recovering to $71.98 a barrel in June, data from the Petroleum Planning and Analysis Cell showed.
India spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19. The country’s petrol and diesel consumption is expected to grow by 14% and 10% respectively in FY22, according to rating agency Icra.
This also comes at a time when state owned firms have raised India’s domestic cooking gas prices. Effective 1 July, the price of a 14.2 kg non-subsidized Indane liquefied petroleum gas (LPG) cylinder in Delhi has been increased by ₹25.50 to ₹834.50. This price increase follows after LPG cylinder prices remained stable for the consecutive months of April, May and June.
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