Petrol and diesel prices to drop further only if this happens…
- Only when the fall in rates of crude oil is sustained for a few more days there would be a reduction in retail petrol and diesel prices.
Petrol and diesel prices have been static for the last 25 days after the central government reduced excise duty on both fuels. The pricing of both motor fuels is likely to come down further. However, there is a catch. It will happen only if the international oil prices drop sustainably.
Domestic retail prices of petrol and diesel in India are fixed on a 15-day rolling average. The price revision in India is based on the average benchmark international fuel rate in the previous fortnight.
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The global benchmark Brent crude oil prices remained largely range-bound at around $80-82 per barrel during November. On Friday, crude oil prices dropped by around $4 per barrel.
If this slump in global crude oil prices continues, then the Indian market too is likely to witness further drops in petrol and diesel prices, bringing more relief for the domestic consumers.
The latest slump in global crude oil prices come as a knee jerk reaction from concerns around the new Covid-19 variant discovered in Southern Africa. It might dampen economic growth and trigger a demand slump across the world, resulting in a drop in crude oil prices.
Retail prices of petrol and diesel have remained unchanged since November 5. The static prices of petrol and diesel come after a decrease in excise duty by ₹5 per litre and ₹10 a litre respectively. After that, several state governments too reduced their respective VAT rates on motor fuels to provide further relief to consumers.
With these subsequent tax cuts, petrol and diesel prices have been reduced to below ₹100 a litre in many places. However, the major cities are still selling per litre petrol and diesel at ₹100 or above prices. Petrol in Delhi now costs ₹103.97 a litre and diesel is priced at ₹86.67 per litre.