Rs 100 may be the new normal for petrol in high-VAT states

Soon, Rs 100 could be the new normal for a litre of regular petrol in states with high VAT and cess, unless fuel taxes are reduced or the oil-producing countries raise production sharply from April.

Three Wall Street banks – Goldman Sachs, Morgan Stanley and Bank of America – have in the last two days forecast oil at $70/barrel in the next few months and even a spike to $75 thereafter. What is worse, Goldman said even an OPEC+ decision to raise output would not calm prices as supply would still lag behind demand.

Petrol recently topped the Rs 100 a litre-mark in some cities of Rajasthan and Madhya Pradesh on sustained oil price rally and high taxes. In a sign of things to come, benchmark Brent crude on Wednesday stayed put above $65/barrel. India’s crude purchase cost too rose to $63.90 on Tuesday (there is a day’s lag) from $62/barrel on Monday.

The mix of crude bought by Indian refiners usually costs $2-3 less than Brent and the gap narrows as price rises. So at $70/barrel of Brent

ET Energy World
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