Petrol and diesel prices have continued to fall for the five straight days as the benchmark Brent crude oil price has settled below $64 per barrel. Petrol and diesel prices on February 12 were cut by 21 paise and 28 paise respectively even as Brent crude oil price jumped up 63 cents to $63.42 per barrel.
According to Indian Oil’s website, the petrol price in Delhi was Rs 73.01 per litre; Kolkata Rs 75.70; Mumbai Rs 80.87; Chennai Rs 75.73, while diesel price in Delhi was Rs 63.62 per litre; Kolkata Rs 66.29; Mumbai Rs 67.75; Rs Chennai 67.09.
In the past five days, petrol price has been cut by 37 paise and diesel price by 60 paise as the Brent crude oil price hit a nearly a two month low of $63.42 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures fell below $60 mark at $59.83 a barrel. The crude oil prices fell on the back of soaring output by the United States.
While Finance Minister Arun Jaitley on Saturday said that the crude oil prices were uncertain to predict, RBI governor Urjit Patel said that the RBI needs to be prepared for oil movement either way — whether up or down — saying that the global charts have shown a two-way movement in recent days.
The petrol and diesel prices have been surging on the back of rallying crude oil prices, which in the mid-January touched $70 per barrel mark amid the fears of the production cut by OPEC and non-members led by Russia. However, with Iran announcing to increase its oil production over the next four years, the oil prices began falling.
Meanwhile, higher US oil production is also a factor behind the fall. The Brent crude oil price was recorded $64.81 a barrel, while US WTI crude was down 64 cents, to settle at $61.15 a barrel, Reuters reported.
The fuel prices in India have been on a rising streak since October last year after an excise duty cut was announced by the Narendra Modi government of Rs 2 per litre. However, soon, the impact of the cuts was reversed on rallying crude oil price due to production cuts by the OPEC and non-members led by Russia.
Between October 4 and February 6, the petrol and diesel prices were hiked by over Rs 5 and Rs 7 per litre, while Brent crude oil price surged over $13 per barrel even hitting $71 per barrel mark in mid-January. Despite the cuts by a few paise in the last five days, the petrol and diesel prices continue to remain nearly four-year-high and a record high respectively.
When fuel prices were surging, the oil ministry requested Arun Jaitley to give some relief in the Budget 2018, however, tight fiscal space is understood to have left no room any excise duty cut. It was also reported that the government is not planning any sops in near future as well.
The Narendra Modi government supported by low crude oil prices for three years hiked the excise duty on petrol and diesel by Rs 12 per litre and Rs 13.77 per litre respectively, before announcing the cut in October. Last week, the RBI, anticipating higher crude oil price along with other factors, kept the repo rate unchanged for the third time at 6%.