Petrol price down by 9 paise to Rs 77.83 in Delhi; crude oil hits two-month low
Recent cut in fuel rates in India have come in the backdrop of continuous fall in international crude oil prices over the week. US crude prices on Monday touched its lowest level in nearly two months.
- Jun 5, 2018,
- Updated Jun 6, 2018 2:29 PM IST
Fuel prices in India are on a decline, though marginally. Petrol price on Tuesday was cut by 13 paise to Rs 77.83 in Delhi. Today's petrol price in Kolkata is Rs 80.47, down by 13 paise; in Mumbai Rs 85.65, cut by 12 paise and Chennai Rs 80.80, down by 14 paise. Diesel price came down by 9 paise to Rs 68.88. Recent cut in fuel rates in India have come in the backdrop of continuous fall in international oil prices over the week. US crude prices on Monday touched its lowest level in nearly two months.
Brent crude futures lost USD $1.50 per barrel to settle at $75.29 per barrel. US crude ended $1.06 lower at $64.75 a barrel, after earlier touching $64.57 - its lowest since April 10. Fuel prices in India are linked to international crude oil and any change in their rates directly affect the pricing back home.
What brought the crude oil prices down was the expectation that oil exporting countries would soon increase the output - a move that will normalise the oil supply. Last year, the crude prices began to shot up after the organisation of the petroleum exporting countries and Russia decided to withhold the excessive output to prop up the prices that had fallen to their lowest in more than a decade. They cut the overall supply by about 1.8 million barrels per day - a step that created the shortage of crude which in turn spiralled the prices.
According to a report in Reuters, OPEC Ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria met unofficially in Kuwait on Saturday. The organisation of the petroleum exporting countries are slated to meet formally in Vienna on June 22 to decide whether the group and non-OPEC members will raise production to ease concerns over potential supply shortfalls from Iran and Venezuela. Venezuela's crude oil production fell nearly 13 per cent last year due to intense internal conflict and Iran is staring at a fresh sanction from the US.
Recently, Goldman Sachs projected an oil price hike to USD 83 per barrel, Morgan Stanley predicted oil hitting USD 90 per barrel, and Bank of America Merrill Lynch said that crude oil could hit USD 100 per barrel by next year. If crude prices go up as predicted then it would hit India really hard. India imports over 80 per cent of its crude oil requirement and it is the world's third largest oil importer.
With today's cut here in India, petrol price in the national capital has come down - in last seven days - by 60 paise from its record high of Rs 78.43 on May 29. Before reducing the prices, oil marketing companies had hiked the fuel cost for 16 consecutive days - from May 13 to May 29, petrol price was raised by Rs 3.8 and diesel by Rs 3.38 per litre.
Sudden hike in petrol and diesel prices was a result of uptick recorded in international crude oil that had gone up due to multiple global factors- fear of new US sanction on Iran and short supply. The outcome of the meeting of the oil producing countries later this month will determine the future prices of oil.
(With inputs from agency)
Fuel prices in India are on a decline, though marginally. Petrol price on Tuesday was cut by 13 paise to Rs 77.83 in Delhi. Today's petrol price in Kolkata is Rs 80.47, down by 13 paise; in Mumbai Rs 85.65, cut by 12 paise and Chennai Rs 80.80, down by 14 paise. Diesel price came down by 9 paise to Rs 68.88. Recent cut in fuel rates in India have come in the backdrop of continuous fall in international oil prices over the week. US crude prices on Monday touched its lowest level in nearly two months.
Brent crude futures lost USD $1.50 per barrel to settle at $75.29 per barrel. US crude ended $1.06 lower at $64.75 a barrel, after earlier touching $64.57 - its lowest since April 10. Fuel prices in India are linked to international crude oil and any change in their rates directly affect the pricing back home.
What brought the crude oil prices down was the expectation that oil exporting countries would soon increase the output - a move that will normalise the oil supply. Last year, the crude prices began to shot up after the organisation of the petroleum exporting countries and Russia decided to withhold the excessive output to prop up the prices that had fallen to their lowest in more than a decade. They cut the overall supply by about 1.8 million barrels per day - a step that created the shortage of crude which in turn spiralled the prices.
According to a report in Reuters, OPEC Ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria met unofficially in Kuwait on Saturday. The organisation of the petroleum exporting countries are slated to meet formally in Vienna on June 22 to decide whether the group and non-OPEC members will raise production to ease concerns over potential supply shortfalls from Iran and Venezuela. Venezuela's crude oil production fell nearly 13 per cent last year due to intense internal conflict and Iran is staring at a fresh sanction from the US.
Recently, Goldman Sachs projected an oil price hike to USD 83 per barrel, Morgan Stanley predicted oil hitting USD 90 per barrel, and Bank of America Merrill Lynch said that crude oil could hit USD 100 per barrel by next year. If crude prices go up as predicted then it would hit India really hard. India imports over 80 per cent of its crude oil requirement and it is the world's third largest oil importer.
With today's cut here in India, petrol price in the national capital has come down - in last seven days - by 60 paise from its record high of Rs 78.43 on May 29. Before reducing the prices, oil marketing companies had hiked the fuel cost for 16 consecutive days - from May 13 to May 29, petrol price was raised by Rs 3.8 and diesel by Rs 3.38 per litre.
Sudden hike in petrol and diesel prices was a result of uptick recorded in international crude oil that had gone up due to multiple global factors- fear of new US sanction on Iran and short supply. The outcome of the meeting of the oil producing countries later this month will determine the future prices of oil.
(With inputs from agency)