Govt mulls cutting fuel prices as crude oil prices fall
Oil prices have plummeted to their lowest levels since January improving the profitability of Oil Marketing Companies (OMCs) which gives room to provide relief to consumers.
- Sep 6, 2024,
- Updated Sep 6, 2024 12:18 PM IST
The central government is considering cutting fuel prices as crude oil prices fall to a nine-month low, top government sources told Business Today TV.
Oil prices have plummeted to their lowest levels since January improving the profitability of Oil Marketing Companies (OMCs) which gives room to provide relief to consumers, the source said. The move is also seen in light of upcoming Maharashtra and Haryana Assembly elections.
Inter-ministerial talks are on and we are closely monitoring global developments, the source added.
US crude oil fell more than 1 per cent on Wednesday, tumbling below $70 per barrel and raising speculation that OPEC+ could delay production increases scheduled to begin next month whereas the Brent crude oil prices fell by $1 a barrel to $72.75.
The return of Libyan oil to the market, along with the OPEC+ group's decision to reverse voluntary production cuts starting in October, and increased output from non-OPEC sources, have all contributed to the downward pressure on prices. Goldman Sachs predicts oil prices will fluctuate between $70 and $85 per barrel.
Even if the current lower prices are temporary, the government would remain in a favorable position if prices stabilize around $85 per barrel. This would allow the government to request that state-owned retailers maintain steady retail prices, according to another source.
The centre had last cut prices of petrol and diesel by Rs 2 per litre on March 14, just ahead of general elections.
The central government is considering cutting fuel prices as crude oil prices fall to a nine-month low, top government sources told Business Today TV.
Oil prices have plummeted to their lowest levels since January improving the profitability of Oil Marketing Companies (OMCs) which gives room to provide relief to consumers, the source said. The move is also seen in light of upcoming Maharashtra and Haryana Assembly elections.
Inter-ministerial talks are on and we are closely monitoring global developments, the source added.
US crude oil fell more than 1 per cent on Wednesday, tumbling below $70 per barrel and raising speculation that OPEC+ could delay production increases scheduled to begin next month whereas the Brent crude oil prices fell by $1 a barrel to $72.75.
The return of Libyan oil to the market, along with the OPEC+ group's decision to reverse voluntary production cuts starting in October, and increased output from non-OPEC sources, have all contributed to the downward pressure on prices. Goldman Sachs predicts oil prices will fluctuate between $70 and $85 per barrel.
Even if the current lower prices are temporary, the government would remain in a favorable position if prices stabilize around $85 per barrel. This would allow the government to request that state-owned retailers maintain steady retail prices, according to another source.
The centre had last cut prices of petrol and diesel by Rs 2 per litre on March 14, just ahead of general elections.