Price freeze eats into margins

DOMESTIC REVIEW / ENERGY

The domestic oil marketing companies continue to be under dual pressure from increasing international prices of crude oil and petroleum products on one side, and the fixed retail prices of both petrol and diesel in the domestic market on the other.

The third fortnightly revision date on February 15 passed off without the companies being allowed to increase retail prices of the two auto fuels in view of the forthcoming general elections. The decision ignored the fact that international oil prices have been galloping.

The international crude oil market continued to remain bullish during the past week in view of the lower gasoline and furnace oil stock in the USA, the biggest energy consumer in the world.

The market remains sceptical about OPEC's ability to implement the crude output curbs announced last week.

So far, there has been no sign the cartel is clamping down on quota busting, with customers of major Gulf producers reporting no reduction in planned March supplies against February.

The international benchmark Brent (dated) crude, which was hovering at $ 20.41 a barrel on February 11, moved up to $ 31.45 a barrel on February 13, to be quoted at $ 31.50 a barrel on February 18.

Jet fuel (Singapore), which was being quoted at $ 37.20 a barrel on February 11, moved up to $ 38.20 a barrel on February 13, and touched $ 38.43 a barrel on February 18.

Prices of gas oil (Singapore) with 0.5 per cent sulphur, which were ruling at $ 37.23 a barrel on February 11, moved up to $ 38.20 a barrel on February 13, and further hardened to $ 38.75 a barrel on February 18.

Naphtha (Singapore), which was being quoted at $ 33.38 a barrel on February 11, touched $ 32.73 a barrel on February 13, and moved down to $ 35.25 a barrel on February 18.

Prices of unleaded petrol (fob Singapore), which were ruling at $ 36.93 a barrel on February 11, moved down to $ 37.85 a barrel on February 13, and went up further to $ 40.23 a barrel on February 18.