International crude oil prices have softened by almost 45% from the highs of $148 a barrel two months back to $80 a barrel levels on October 10. A correction of more than $4 a barrel was witnessed in Friday?s trade of crude oil.

Brent North Sea crude sank below the $80 mark for the first time in about a year. Brent North Sea crude for November delivery fell to less than $80 at $79.08 a barrel in London. The contract first rose through the $80 level in late September 2007.

In afternoon trade New York’s main contract, light sweet crude for delivery in November, plunged $4.08 to $82.51 after dropping $ 2.36 to 86.59 at the New York Mercantile Exchange.

The Indian basket of crude oil has also fell by almost 45% since June 2008, when it was ruling at $ 129 a barrel levels. However, despite such a steep downtrend in crude oil prices, the consumers are unlikely to benefit from this fall.

Thanks to the global financial turmoil, which has resulted in a heavy depreciation of rupee against the US dollar. A comparison with April 2008 levels show that rupee has depreciated by nearly 25%. Therefore, most of the gains resulting from the cooling off the crude oil prices have been offset by the depreciation of the rupee against the dollar. India imports 80% of its crude oil requirements.

Even after a steep fall in the price of Indian basket of crude oil, the required increase in retails price of petrol (at Delhi) still stands close to Rs 4.68 a litre, diesel by Rs 11.48 a litre, kerosene by Rs 28.07 a litre and LPG by Rs 322.14 a cylinder.

For October 2008, the under-recoveries of the three OMCs?Indian Oil, HPCL and BPCL?would be around Rs 12,000 crore. If the international oil prices remain at current levels during the rest of the fiscal year and retail prices remain unchanged, the total under-recoveries of OMCs during 2008-09 are estimated at around Rs 1,65,000 crore.

OMCs have been borrowing heavily for financing their working capital and capex requirements. The combined borrowings of OMCs which stood at Rs 48,400 crore in March 2007 and Rs 66,900 crore in March 2008 have increased to Rs 93,500 crore as of August 2008.

The credit limits of the OMCs have recently been enhanced by Rs 14,000 crore to enable them to meet their fund requirement till the end of October 2008.