Oil prices at seven-month low but no change in petrol and diesel prices in India – The New Indian Express

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By PTI

NEW DELHI: International oil prices hit a seven-month low, but there is no change in the retail price of gasoline and diesel in India as fuel retailers owned by the are recovering losses incurred to hold rates for a record five months despite rising costs.

International benchmark Brent fell below $90 a barrel last week for the first time since early February as recession fears weighed on demand.

It has since recovered and is trading at $92.84 a barrel, the lowest in six months.

Prices fell despite bullish developments, including Russia keeping the North Stream pipeline offline and the OPEC producer cartel and its allies (OPEC+) cutting production.

But that has not resulted in any revision to India’s retail petrol and diesel prices and they continue to be frozen for a record 158 days.

Responding to reporters’ questions about the lack of change in fuel prices, Petroleum Minister Hardeep Singh Puri on Friday sought to link the lack of revision to losses suffered by state-owned fuel retailers to maintain rates. unchanged when international oil prices hit a multi-year high.

“When (oil) prices were high, our (petrol and diesel) prices were already low,” he said.

“Have we recouped all our losses? he kept asking.

However, he did not specify the losses incurred to keep rates stable since April 6.

The basket of crude oil imported by India averaged USD 88 per barrel on September 8.

It had averaged $102.97 in April, before rising to $109.51 the following month and $116.01 in June.

Prices started falling in July when the Indian basket averaged $105.49 per barrel.

It averaged $97.40 in August and $92.87 in September so far.

State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) did not exercise their right to adjust the retail price of the petrol and diesel at international cost for over five months now to help the government manage runaway inflation.

At one point they were losing Rs 20-25 per liter of diesel and Rs 14-18 per liter of petrol as international oil prices soared.

These losses have been reduced with the fall in oil prices.

“There is no under-recovery (losses) on gasoline now. For diesel, it will take some time to get to that level,” an official said.

But that is unlikely to translate into an immediate rate cut as oil companies will be allowed to recoup losses they have accrued by selling fuel below cost over the past five months, it said. another manager.

Puri had said on Friday that international oil prices needed to stay at $88 a barrel or fall below to provide some relief.

India is 85% dependent on imports to meet its oil needs and retail pump prices are therefore directly dependent on events in world markets.

IOC, BPCL and HPCL are expected to revise the retail price of gasoline and diesel daily based on cost.

But they froze rates for a record 137 days starting Nov. 4, 2021, just as states like Uttar Pradesh went to the polls.

This freeze ended on March 22 this year and tariffs rose by Rs 10 per liter each in just over a fortnight before a new freeze came into effect on April 7.

Petrol currently costs Rs 96.72 per liter and diesel Rs 89.62 in the nation’s capital.

This is down from the price of Rs 105.41 per liter on April 6 for petrol and Rs 96.67 per liter for diesel as the government reduced excise duties to cool fuels. prices.

The increase of Rs 10 per litre, made between March 22 and April 6, was not enough to cover the cost and the new freeze meant more losses accrued, officials said.

Oil companies failed to revise their rates to help the government manage inflation, which had already reached a multi-year high.

It would have increased further if gasoline and diesel prices had risen in line with costs.

The freeze meant that the three retailers posted a combined net loss of Rs 18,480 crore in the June quarter.

Gasoline was deregulated in June 2010 and diesel in November 2014.

Since then, the government has not paid any subsidies to oil companies to compensate them for any losses they may incur by selling fuel at prices below cost.

Thus, oil companies recoup losses when input costs fall, the first official explained.

Russia’s invasion of Ukraine on February 24 sent shock waves through global energy markets.

Initial price spikes turned into persistent price increases as the global community imposed sanctions on key Russian exports.

Brent was at $90.21 a barrel before the invasion and hit a 14-year high of $140 on March 6.

Some of the heat has come out of oil markets in recent weeks on fears that a recession could cut demand.

China saw its crude oil imports drop 9% last month as the country’s zero Covid policy led to full or partial shutdowns in more than 70 cities since late August.

NEW DELHI: International oil prices hit a seven-month low, but there is no change in the retail price of gasoline and diesel in India as fuel retailers owned by the are recovering losses incurred to hold rates for a record five months despite rising costs. International benchmark Brent fell below $90 a barrel last week for the first time since early February as recession fears weighed on demand. It has since recovered and is trading at $92.84 a barrel, the lowest in six months. Prices fell despite bullish developments, including Russia keeping the North Stream pipeline offline and the OPEC producer cartel and its allies (OPEC+) cutting production. But that has not resulted in any revision to India’s retail petrol and diesel prices and they continue to be frozen for a record 158 days. Responding to reporters’ questions about the lack of change in fuel prices, Petroleum Minister Hardeep Singh Puri on Friday sought to link the lack of revision to losses suffered by state-owned fuel retailers to maintain rates. unchanged when international oil prices hit a multi-year high. “When (oil) prices were high, our (petrol and diesel) prices were already low,” he said. “Have we recouped all our losses? he kept asking. However, he did not specify the losses incurred to keep rates stable since April 6. The basket of crude oil imported by India averaged USD 88 per barrel on September 8. It averaged $102.97 in April, before climbing to $109.51 in the following months and $116.01 in June. Prices started falling in July when the Indian basket averaged $105.49 per barrel. It averaged $97.40 in August and $92.87 in September so far. State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) did not exercise their right to adjust the retail price of the petrol and diesel at international cost for over five months now to help the government manage runaway inflation. At one point they were losing Rs 20-25 per liter of diesel and Rs 14-18 per liter of petrol as international oil prices soared. These losses have been reduced with the fall in oil prices. “There is no under-recovery (losses) on gasoline now. For diesel, it will take some time to get to that level,” an official said. But that is unlikely to translate into an immediate rate cut as oil companies will be allowed to recoup losses they have accrued by selling fuel below cost over the past five months, it said. another manager. Puri had said on Friday that international oil prices needed to stay at $88 a barrel or fall below to provide some relief. India is 85% dependent on imports to meet its oil needs and retail pump prices are therefore directly dependent on events in world markets. IOC, BPCL and HPCL are expected to revise the retail price of gasoline and diesel daily based on cost. But they froze rates for a record 137 days starting Nov. 4, 2021, just as states like Uttar Pradesh went to the polls. This freeze ended on March 22 this year and tariffs rose by Rs 10 per liter each in just over a fortnight before a new freeze came into effect on April 7. Petrol currently costs Rs 96.72 per liter and diesel Rs 89.62 in the nation’s capital. This is down from the price of Rs 105.41 per liter on April 6 for petrol and Rs 96.67 per liter for diesel as the government reduced excise duties to cool fuels. prices. The increase of Rs 10 per litre, made between March 22 and April 6, was not enough to cover the cost and the new freeze meant more losses accrued, officials said. Oil companies failed to revise their rates to help the government manage inflation, which had already reached a multi-year high. It would have increased further if gasoline and diesel prices had risen in line with costs. The freeze meant that the three retailers posted a combined net loss of Rs 18,480 crore in the June quarter. Gasoline was deregulated in June 2010 and diesel in November 2014. Since then, the government has not paid any subsidies to oil companies to compensate them for any losses they might incur by selling fuel at prices below cost. Thus, oil companies recoup losses when input costs fall, the first official explained. Russia’s invasion of Ukraine on February 24 sent shock waves through global energy markets. Initial price spikes turned into persistent price increases as the global community imposed sanctions on key Russian exports. Brent was at $90.21 a barrel before the invasion and hit a 14-year high of $140 on March 6. Some of the heat has come out of oil markets in recent weeks on fears that a recession could cut demand. China saw its crude oil imports drop 9% last month as the country’s zero Covid policy led to full or partial shutdowns in more than 70 cities since late August.

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