Fuel price shock coming as world’s most valuable crude nears $100
NEW DELHI: Fuel prices in India are poised to go up by Rs 7-8 per litre as Brent, the global benchmark crude, neared the $100 per barrel-mark on Tuesday as the Ukraine crisis spooked an oil market, already struggling to meet rising demand.
As Brent topped $99/barrel at one point, the mix of crude bought by India, otherwise known as the Indian Basket, too rose to $93.6, marking a $10 increase since November 4 when the Centre cut excise duty by Rs 10 on a litre of diesel and Rs 5 on petrol to give relief from high oil prices ahead of the state polls.
Pump prices have remained unchanged since then under an informal government diktat. The sharp increase has widened the gap between the actual cost and retail prices of petrol and diesel, leading to under-recovery for retailers. According to ballpark, every $1 increase in crude price impacts retail rate by 70-80 paise.
