The price of the Indian basket of crude oil has hit the lowest levels since the Ukraine conflict began in February this year, but pump prices are still ruling as these were when the rates were close to $130 a barrel.
The price of crude oil is trading near $73 a barrel, a decline of about 40 per cent, and could slip further in the coming days if China is unable to extricate itself from an economic slowdown due to the Covid whammy. In addition, crude prices will remain under pressure because of slow global growth projected by the World Bank and the fading concerns around Russia’s invasion of Ukraine.
But domestic users are unlikely to benefit in the coming days with the latest indication coming from Petroleum Minister Hardeep Puri, who said state-owned retailers had incurred losses of Rs 27,000 crore due to selling pump fuel at below imported prices. His indication was that the companies would like to use the cushion of lower global crude prices to recoup their losses.Puri also indicated that the government would not take a relook at the high central taxes on fuel by deflecting the issue when he was cornered by the Opposition members in Parliament last week. Instead, Puri referred to six states, mostly opposition-ruled, which had not cut local taxes and said prices in those states would come down if those states did so.
The minister had said the retail prices of petrol and diesel in India had increased by 18.95 per cent and 26.5 per cent, respectively, over the past two years. In the same period, the average price of the Indian crude oil basket increased by 102 per cent.
