Petrol at ₹200 per litre? Russia says global crude may hit $300 mark

The fast-rising prices of crude in the global market could potentially reach unprecedented levels in the coming times as the Russia-Ukraine conflict continues. And with US banning import of Russian oil, Moscow has warned that such bans could lead to per barrel cost of oil possibly touching $300. Quite obviously, this would have an extremely serious impact for countries across the world, including India which imports almost 85% of its oil requirements.

Brent crude rates touched $135 a barrel on Tuesday, up from around $77 at the beginning of this year. And there is just no sign of the rate flight being arrested any time soon. "It is absolutely clear that a rejection of Russian oil would lead to catastrophic consequences for the global market," said Russian Deputy Prime Minister Alexander Novak. "The surge in prices would be unpredictable. It would be $300 per barrel if not more."

The basket of crude oil that India purchases has gone past $126. It was at $81.5 per barrel when petrol and diesel rates were frozen four months back.

Present rates and the trend are already posing a massive challenge for global economies. Here in India, petrol and diesel prices have remained unchanged for four months but a hike - and a considerable one at that - is expected in the coming days. A report by ICICI securities says that petrol and diesel rates have to be increased by more than ₹12 a litre for OMCs to break-even. This means per litre petrol price in Delhi, for instance, would once again breach the three-digit mark. It is at ₹95.41 a litre at present. In other metropolitan cities like Mumbai, Kolkata and Chennai, the current rates are already in three figures and would increase substantially further.

But if global crude rates double, as Novak warns, this could potentially see per litre petrol price more than doubling in India and other parts of the world. And while the per litre cost of fuel in India also depends on the central and state taxes, the falling value of INR against Dollar isn't exactly helping matters either. An official with a PSU fuel retailer told news agency PTI that the situation is under careful watch. "We are watching the situation closely. We need to see if the current spike in international oil prices is a temporary phenomenon or is it here to stay," he reportedly said.