Petrol and diesel prices increasing after elections – Crude oil close to $100
For India, Russian supplies account for a very small portion of imports; It is the price of crude that is causing concern
International oil prices hovered near $100 a barrel on Tuesday after Russian President Vladimir Putin sent troops to Ukraine, but petrol and diesel prices in India remained stable and as assembly elections in states like Uttar Pradesh end. It is expected to increase thereafter.
Amid fears of a supply disruption due to a Russian offensive, Brent crude for April delivery on ICE in London rose 4.18% to $99.38 a barrel on Tuesday morning, before settling some gains above $98. was for.
The last time Brent crossed $99 a barrel was in September 2014.
Russia produces a third of Europe’s natural gas and about 10% of global oil production. About a third of Russian gas supply to Europe usually travels through pipelines crossing Ukraine.
But, for India, the percentage of Russian supply is much less. While India imported 43,400 barrels of oil per day from Russia in 2021 (about 1% of its total imports), 1.8 million tonnes of coal imports from Russia in 2021 accounted for 1.3% of all coal imports. India buys 2.5 million tonnes of LNG annually from Gazprom in Russia.
While supply is a bit of a concern for India at the moment, it is the prices that are a cause for concern.
Domestic fuel prices – which are directly linked to international oil prices – have not been revised for a record 110 days in a row.
Rates should be revised on a daily basis, but state-owned fuel retailers IOC, BPCL and HPCL reduced rates, not launching a campaign to elect a new government in Uttar Pradesh, Punjab and three other states Happened.
Industry officials said the retail pump rates are in line with the price of $82-83 a barrel and they will surely go up once the elections are over next month.
Petrol in Delhi costs Rs 95.41 per liter and diesel costs Rs 86.67. This price is after the reduction in excise duty and reduction in VAT rate by the state government.
Before these tax cuts, the price of petrol touched an all-time high of Rs 110.04 per liter and diesel came down to Rs 98.42. These rates were in line with Brent’s peak of $86.40 per barrel on October 26, 2021. Brent was at $82.74 on November 5, 2021, before it started falling and touched $68.87 a barrel in December.
However, prices started rising after that and expanded by 12% in February alone, he said.
Petrol and diesel prices have remained frozen before the crucial elections.
There was a 19-day price freeze on petrol and diesel ahead of the Karnataka elections in May 2018, despite international fuel prices rising by around $5 a barrel. However, as the elections ended, oil companies swiftly delivered the desired growth to customers – in 16-straight days since May 14, 2018. After the hike, the price of petrol went up by ₹3.8 per liter and that of diesel by ₹3.38 per litre. ,
Similarly, he stopped revising fuel prices for almost 14 days ahead of the assembly elections in Gujarat in December 2017.
These companies also capped the prices of petrol and diesel between January 16, 2017 and April 1, 2017, when assembly elections were held in five states – Punjab, Goa, Uttarakhand, Uttar Pradesh and Manipur.
Industry sources said that during the 2019 general elections, they controlled the revision by not passing all the desired increase in rates to consumers. The hike in rates started a day after the last phase of polling for the Lok Sabha elections ended.
The current 110-day interval is the longest since the adoption of the daily fuel price revision in June 2017. Earlier, there was an 82-day lag in rate revision between March 17, 2020 and June 6, 2020.
After a gap of 82 days in the rate revision in 2020, the government increased the excise duty on petrol and diesel by Rs 3 per liter to extend the benefits from the fall in international rates. On May 6, 2020, the government again increased the excise duty on petrol by ₹10 per liter and on diesel by ₹13 per liter.
