Petrol and diesel price hikes look inevitable

Petrol and diesel were last increased on July 17 and July 15, respectively

Petrol and diesel prices are likely to rise on global cues. Crude oil prices in the international market rose to six-week high lately, but domestic prices have been unchanged. The current sale price of petrol and diesel are Rs 101.19 a litre and Rs 88.62 a litre respectively in the national capital.

"The optimism about global economic growth despite the COVID-19 pandemic along with more than anticipated fall in the US crude oil inventories have further bolstered the crude oil market sentiment. Brent crude oil had closed at $75.31 a barrel on September 17," said an official at one of the oil marketing ocmpanies.

Retail prices of petrol and diesel in India are also likely to be affected with the surge in international oil prices. "During the last 10 days itself, international crude oil prices have increased by around $3 a barrel. However, no increase in the retail prices of petrol and diesel have been carried out by oil marketing companies yet. In case international crude oil prices continue to remain at such high levels, increase in retail prices going forward will be inevitable," he added.

Crude oil prices have recovered from the decline in August (till August 20) as concerns about oil demand in Asia-Pacific region eased. Oil demand in the US and Europe continued to show signs of strength.

With the easing of travel restrictions supported by seasonal strength in transportation fuels and increasing preference for personal mode of transportation, global demand for crude oil has increased significantly.

Petrol sales in India during August 2021 have exceeded even the pre-pandemic sales level prevailing during August 2019. Although diesel sales are slightly lower than projected, numbers are expected to pick up by the festive season.

Global crude oil output is poised to rise in the coming months after OPEC+ agreed a new deal to unwind its remaining curbs. "Despite that global demand is expected to outpace supply during the year due to which international oil prices will likely remain firm in the near to mid-term," said the person quoted above.

Petrol and diesel prices were last increased on July 17 and  July 15, respectively. Retail selling price of both products had earlier been decreased by Rs 0.65 a litre and Rs 1.25 a litre in Delhi from July 18 onwards to pass on the decrease in international prices.