Surge in global crude oil prices may impact fuel prices in India
New Delhi: Crude oil prices in the international market rose to six-week high lately, as US oil productionremained slow to return after hurricane Ida slammedinto the US Gulf Coast during August
last week.
The optimism about global economic growth despite the Covid pandemic along with more than anticipated fall in US crude oil inventories have further bolstered the crude oil market sentiment. Brent crude oil futures on ICE had closed at $75.31/bbl on Friday.
The crude oil prices have recovered from the decline in August as concerns about oil demand in Asia-Pacific region eased and oil demand in the US and Europe continued to show signs of strength. With easing of travel restrictions supported by seasonal strength in transportation fuels and increasing preference for personal mode of transportation, global demand for crude oilhas increased
significantly.
In India, Petrol sales during August 2021have exceeded even the pre-pandemic sales level prevailing during August 2019.
Although Diesel sales are slightly lower than projected, numbers are expected to pick up by the festive season. Global crude oil output is poised to rise in the comingmonths after OPEC+ agreed a new deal to unwind its remaining curbs.
Despite that, global demand is expected to outpace supply during the year due to which international oil prices will likely remain firm in thenear to mid-term. Retail Selling Prices (RSP) of Petrol and Diesel in India are also likely to be affected with the surge in international oil prices.During the last ten days itself, international crude oil prices have increased by around $3/barrel.
However, no increase in the retail prices of Petrol and Diesel have been carried out by OMCs yet. In case international crude oil prices continue to remain at such high levels, increase in retail prices going forward will be inevitable. RSP of Petrol and Diesel were last increased on July 17, 2021 and July 15, 2021 respectively. Earlier, RSP of both products had been decreased by Rs 0.65/litre and Rs 1.25/litre at Delhi from July 18 onwards to pass on the decrease in international prices.
