Retail prices of fuel rise again, petrol tops ₹99/litre in Delhi
Premium- This is the fifth hike in prices in six days after daily price revision of retail fuels started on 22 March
PremiumNEW DELHI : Retail prices of petrol and diesel were raised by 50 and 55 paise to ₹99.11 and ₹90.42 per litre, respectively, in Delhi on Sunday by oil marketing companies (OMC). Since 22 March, petrol prices have increased by ₹3.7 a litre, and diesel by ₹3.75 per litre in five tranches.
Revision of retail auto fuel prices was held back for over four months since November, despite global crude oil prices surging by over $40 per barrel. Considering the volatility in crude prices, experts said retail prices may rise further.
A report by Moody’s Investor Services said state-owned refining and marketing companies have cumulatively lost around $2.25 billion ( ₹19,000 crore) in revenue on petrol and diesel sales between November and March 2022.
Furthermore, a recent ICRA report said graded retail price increase of auto fuels will prolong the losses for oil marketing companies. The rise in retail prices have, however, fuelled inflationary concerns, which may hurt growth. Experts said if the price of the Indian crude basket increases by $25 per barrel, with reference to a base of $75 per barrel, retail inflation may rise by 100 basis points.
Retail inflation in India, measured by the consumer price index (CPI), came in at 6.07% in February, data from the National Statistical Office showed. With the rise in global energy prices—crude oil and natural gas—prices of retail auto fuels, including liquified petroleum gas, compressed natural gas and piped natural gas, were increased in the past one week. On 22 March, OMCs raised the prices of non-subsidized domestic cooking gas cylinders by ₹50 after a gap of over five months. In Delhi a 14.2-kg non-subsidized LPG cylinder now costs ₹949.50. It was the first hike since 6 October. On 24 March, Indraprastha Gas Ltd raised CNG and PNG prices in the National Capital Region by ₹1 per kg to ₹59.01 and by ₹1 per standard cubic metre to ₹36.61, respectively.
Crude oil prices, which have been witnessed extreme volatility following the Russia-Ukraine conflict are expected to remain at elevated levels. On 25 March, the May contract of Brent futures on Intercontinental Exchange closed at $120.65, up 1.36% from its previous close. The May contract of West Texas Intermediate on the NYMEX rose 1.39% to $113.90/barrel.On 7 March, Brent was at $139.13 a barrel, the highest since 2008. High crude oil price impacts the economy as India imports 85% of its energy requirements. The Indian basket, comprising Oman, Dubai and Brent crude was at $117.71/barrel on 24 March, as per data the ministry of petroleum and natural gas.
Kshitij Purohit, lead for commodities and currencies at CapitalVia Global Research said in the coming week Brent may trade between $115 and $134 per barrel.
