OIL & GAS

There’s a crude reality to fuel price hikes

Fuel prices in the last fortnight have risen across India, with prices varying across states based on different VAT rates, charged by different states. As on June 21, 2020, petrol rose to Rs 79.23 a litre in the national capital, while diesel climbed to Rs 78.27 per litre. In Bengaluru, petrol is priced at Rs 81.81 per litre and diesel at Rs 74.43 per litre. Is the fuel price hike justified and, why have prices domestically risen?

First and foremost, Brent crude oil price, the benchmark that India primarily uses, has risen by about 162% from a low of $16 per barrel in April 2020,to close at roughly $42,on June 19,2020. Domestic fuel prices, largely market driven, have, therefore, risen in tandem.

Recent Brent crude price rise has been driven by these factors–output cuts to the tune of 9.4 million barrels per day in May by Saudi Arabia led Opec and its allies like Russia

Source
ET Energy World
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