Petrol and diesel were retailing at Rs90.99 per litre and Rs81.42 per litre respectively on Thursday in Delhi at state run Indian Oil Corporation Ltd’s outlets
NEW DELHI :
State-owned oil marketing companies (OMCs) raised petrol and diesel prices on Thursday. The transportation fuel prices were increased third day in a row, after the results were declared for the assembly elections in West Bengal, Assam, Kerala, Tamil Nadu, and Puducherry.
Petrol and diesel prices were raised by 25 paise per litre and 30 paise per litre respectively in the national capital. As a result, petrol and diesel were retailing at Rs90.99 per litre and Rs81.42 per litre respectively on Thursday in Delhi at state run Indian Oil Corporation Ltd’s outlets.
This comes against the backdrop of a second wave of covid-19 pandemic raging across India, a major energy consumer.
“Firmer fundamentals are expected beginning in May with sequential demand increases. Oil supply growth is expected to lag demand growth with ongoing Opec restraint (on 27 April, Opec+ decided to maintain its production plan from 1 April). That will require stock draws to cover which are expected to be substantial in May through August," said Richard Joswick, global head of oil pricing, operations and trade flow analytics, S&P Global Platts in a statement.
“Platts has tempered its price forecasts accordingly but still expects the next drive for higher prices will likely lead the fundamentals with peaks around mid-year over $70/b," he added in the statement.
The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was at $68.35 a barrel on 5 May. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April last year before recovering to $63.40 a barrel in April, data from the Petroleum Planning and Analysis Cell showed.
Interestingly, the diesel and petrol retail prices in India have remained subdued during the elections, with three government-run oil marketing companies—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—refraining from raising prices.
The state-run OMCs and the government have maintained that there is no correlation between elections and transportation fuel price freeze. The government’s stand has been that it has got no role in pricing since India’s three government-run OMCs introduced dynamic fuel pricing, joining countries such as the US and Australia, where fuel prices change daily depending on global oil price fluctuations.