Petrol and diesel prices rose for the second straight day on Sunday as crude oil recovered from the steep fall it had amid global lockdown.
Petrol and diesel prices in India have started climbing up again with the rise in crude oil prices even as fuel prices did not fall in sync with crude oil price during coronavirus lockdown. Petrol and diesel prices rose for the second straight day on Sunday as crude oil recovered from the steep fall it had amid global lockdown. Petrol and diesel prices rose 60 paisa per litre in Delhi, pushing petrol prices to Rs 72.46 per litre from Rs 71.86, and diesel prices to Rs 70.59 a litre from Rs 69.99 yesterday, according to IOCL.
To take advantage of falling crude prices in the international market, the government had raised excise duty on petrol by Rs 10 per litre and on diesel by Rs 13 per litre last month. However, now that the crude prices are rebounding, retail prices are also rising significantly. Apart from high taxes on fuel, the government has also taken full advantage of cheap crude oil by filling the strategic reserves to full capacity. The government claimed that it has saved Rs 5,000 crore in foreign exchange while strengthening its energy security by filling the strategic reserves.
As the government lifted the lockdown restrictions, including those on economic activity, across the country, the oil demand is on a rise. A similar phenomenon is being observed in other nations too as various governments have announced lifting the travel restrictions and allowing the economic activity. The pick up in industrial production and retail usage of fuel has further helped the crude prices to recover and uncertainty to partially fade away.
Meanwhile, OPEC producers and allies have agreed to extend their historic production cut for another month as crude recovers to near $40 a barrel. The producers had first agreed in April that it would cut supply by a record 9.7 million barrels every day during May-June to offset the global oil market and lift prices that collapsed due to the coronavirus crisis. On the other hand, the crude oil demand has also started to recover as several countries continue to lift lockdown restrictions.