Petrol, diesel prices unchanged for three weeks: Check details here

The retail prices of petrol and diesel have remained unchanged for almost three weeks in the national capital despite global crude oil prices falling by up to $5 a barrel during this period. According to oil sector analysts, this could be an attempt by oil-marketing companies (OMCs) to make margins and create a buffer to keep prices under check.

Despite the price of crude oil tempering, petrol and diesel are sold at record high levels across the country. The price of petrol has remained unchanged at Rs 101.84 since July 17, while it’s at Rs 89.87 for diesel since July 15. During this period, Brent, the most popular grade of crude oil, has moved from $68.74 a barrel on July 19 to $75.38 a barrel on July 30 -- and down to $70.27 a barrel on August 4. Brent was trading at $71.86 a barrel on Friday.

Typically, the retail prices of petrol and diesel are dependent not just on the latest crude oil price movement, but also on the movement of the exchange rate, international prices of petrol and diesel, and the marketing margin charged by OMCs.

“The current retail price is generally derived from these international prices, which normally mirror the movement of crude prices, and are based on the last 15-day rolling average,” said Bhanu Patni, oil and gas analyst at India Ratings & Research.

“However, the prices remaining unchanged could also imply that OMCs are building a higher marketing margin to recover for times when margin could not be increased due to high crude prices,” she said.

Responding to a query on the petrol and diesel prices in the light of the current crude oil price movement, Mukesh Kumar Surana, chairman and managing director of Hindustan Petroleum Corporation, said: “Product prices are also dependent on supplies and demand for them. So, as there is more consumption with the opening of lockdowns, the petrol and diesel prices are also firming up. The prices have remained unchanged for a while, and if international factors remain the same, the petrol and diesel prices will remain at the current levels.”

“Petrol and diesel prices are linked to international prices of these commodities…Presently, the crude and product prices are higher with crude prices moving between $70 and $78 a barrel. It is expected that they will remain between $70 and $75 a barrel in the near future,” Surana added.

Prashant Vasisht, vice president and co-head (corporate ratings) at ICRA, said, “The impact of $1 a barrel in the crude oil price is about 60 paise on petrol and 55 paise on diesel, considering the taxes in Delhi.”

“The impact of Rs 1 depreciation in the exchange rate is about 65 paise on petrol and 60 paise on diesel in Delhi,” he said.