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Business News/ Companies / News/  Petrol, diesel prices likely to fall further: 5 things to know

Petrol, diesel prices likely to fall further: 5 things to know

Crude oil futures plunged 7.1% in New York on Tuesday for the biggest one-day drop in three years. The plunge is likely to impact petrol and diesel prices tomorrow in India, where oil companies consider a 15-day average price to compute retail prices of fuel.

The exchange rate of the rupee against the dollar is the second biggest factor in computation of petrol and diesel prices in India. Photo: Mint

New Delhi: After crude oil prices fell by 7% yesterday and the rupee appreciated to 72 against the US dollar today, petrol and diesel prices in India are likely to fall further tomorrow. Fuel prices haven’t been increased since almost a month now, and were kept unchanged today by state-run oil marketing companies. A litre of petrol now costs 77.43 in Delhi, 82.94 in Mumbai, 80.42 in Chennai, 78.05 in Bengaluru and 79.36 in Kolkata.

Diesel, on the other hand, costs 72.19 in Delhi, 75.64 in Mumbai, 76.30 in Chennai, 72.58 in Bengaluru and 74.05 in Kolkata.

5 things to know about petrol, diesel prices in India:

1. Petrol prices had touched an all-time high of 84 per litre in Delhi and 91.34 in Mumbai on October 4. Fuel prices declined the day after following a cut in excise duty by the Centre and a subsequent reduction in sales tax or VAT by several state governments. Besides the state-run oil companies are also bearing a loss of Re 1 per litre of petrol and diesel sold. Thereafter, crude oil prices entered a bear market, resulting in a drop of petrol and diesel prices in India.

2. Since early October, the price of crude oil has fallen by a quarter to below $70 a barrel, its lowest in eight months. It is one of the biggest declines since a price collapse in 2014.

3. Benchmark crude futures climbed to their highest since 2014 in early October on fears that American sanctions against Iran would crimp supply. Yet soaring production in Saudi Arabia, Russia and the US, as well as unexpected US waivers for some buyers of Iranian crude, have provided the market with a buffer to potential supply shocks. The International Energy Agency has also forecast surplus oil supply in 2019.

4. Crude oil futures plunged 7.1% in New York on Tuesday for the biggest one-day drop in three years. The plunge is likely to impact petrol and diesel prices tomorrow in India, where oil companies consider a 15-day average price to compute retail prices of fuel.

5. The exchange rate of the rupee against the dollar is the second biggest factor in computation of petrol and diesel prices. The rupee, which has lost 11% of its value this year, had hit a record low of 74.4825 per dollar on October 11 but is now trading close to 72 a dollar.

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