Indian oil basket at new high

Indian oil basket at new high

BS Reporter / New Delhi May 6, 2008

The basket of crude oil that Indian refiners buy hit a new high of $112.56 per barrel on Monday, the latest day for which data is available. The basket rose $4.78 from its Friday's close even as the price of crude oil in the New York Merchantile Exchange hit a record $120.36 per barrel late on Monday.

Supply concerns arising from geo-political tension and a weak dollar have pushed up prices of oil over the past few days. Geo-political tension between Turkish troops and Kurdish rebels, and frequent militant attacks on oil pipelines in Nigeria are boosting oil prices.

The Indian oil basket, which comprises Oman-Dubai sour (high sulphur) grade crude oil and Brent dated sweet (low sulphur) crude oil in a 61.4:38.6 ratio, had touched $112.50 per barrel on April 28.

The basket has averaged $110.17 per barrel so far this month compared with $105.77 per barrel in April and $99.76 per barrel in March.

Refineries in India buy oil at global market prices but their marketing divisions sell the petroleum products, such as petrol and diesel, at subsidised prices. The three government-owned oil marketing companies are thus losing around Rs 450 crore daily due to the difference between the market prices and the subsidised prices, also known as under-recoveries.

The government-owned companies