Softening crude oil prices halt fuel price hike
Hyderabad: The Indian Crude Free on Board (FOB) price dropped to $97.82 per barrel on Monday at a rupee-dollar exchange rate of 75.96 per dollar. The price is down about 5 per cent since April 1, when the Indian crude basket price was $103.02 per barrel (at exchange rate of Rs 75.81). Indian Basket (IB), […]
Hyderabad: The Indian Crude Free on Board (FOB) price dropped to $97.82 per barrel on Monday at a rupee-dollar exchange rate of 75.96 per dollar. The price is down about 5 per cent since April 1, when the Indian crude basket price was $103.02 per barrel (at exchange rate of Rs 75.81).
Indian Basket (IB), also known as Indian Crude Basket, is the weighted average of Dubai and Oman (sour) and Brent Crude (sweet) crude oil prices. It is used as an indicator of the price of crude imports in India. One US barrel (bbl) is equal to 159 litre of crude oil.
When compared to the average price in March of $112.87, the current price is lower by 13 per cent. The average price in February this year was $94.07 per barrel and $84.97 per barrel in January. Indian Crude Free on Board indicates that the price is for the commodity loaded onto a vessel and ready for shipping. So, it includes the cost of the commodity and of loading but not the cost to deliver it to its final destination.
BJP MP Subramanian Swamy in a tweet on Monday said the prices of petrol and diesel should come down in proportion to the fall in the Indian crude oil basket prices. “Time to reduce petrol diesel prices to Jan 31 levels since crude oil price has been reduced to $100 minus, the Jan 31 level,” said his tweet, which has since been retweeted more than 2,000 times and liked by more than 11,500 people.
The prices are decided by the public sector oil marketing companies (OMCs) – Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) – in line with changes in the international market prices and other market conditions. Petrol and diesel prices on January 31 in the national capital Delhi were Rs 95.41 per litre and Rs 86.67 respectively. In Hyderabad, petrol was Rs108.2 per litre and diesel was priced at Rs 94.62 per litre.
Indian crude basket prices had softened to $97.82 per barrel at an exchange rate of Rs 75.96 against the dollar as of April 11, compared to $98.68 per barrel the previous day, at an exchange rate of 75.78 per dollar. The data in April so far reflects a softening trend of the crude price. The international benchmark Brent futures hit a high of nearly $140 a barrel last month. While the prices have eased from those highs, international oil prices have mostly remained above $100 per barrel since the Russia-Ukraine military spat began on February 24.
Fuel demand in March 2022 rose to pre-pandemic level as it witnessed a growth of 4.2 per cent. The total consumption of petroleum products in March is 19.41 million tonnes, the highest since March 2019. Stocking up by consumers and petrol pumps in anticipation of price hikes is seen as one of the reasons for the increase in demand. Diesel demand touched 7.7 million tonnes in March. Petrol sales, which crossed the pre-Covid levels a few months ago, were up by 6.1 per cent to 2.91 million tonnes.
On April 6, rates of petrol and diesel were up by 80 paise. This was the 14th increase in 16 days. In Delhi, petrol was 104.61 per litre while diesel was Rs 95.87 per litre. With this hike, the price increased by about Rs 10 per litre. Petrol and diesel prices have not been revised since April 7 as crude oil costs have come down. The petrol price in Delhi on April 11 was Rs 105.41 per litre and diesel price at Rs 96.67. On the same day, the petrol and diesel prices in Hyderabad were Rs 119.49 per litre and Rs 105.49 per litre.
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