Consumers can cheer as oil marketing companies (OMC) may actually bring down the retail prices of petrol and diesel in the coming week and provide relief to them ahead of Diwali.
Oil sector experts said that with global oil prices under pressure from slowing demand in the second wave of the Covid-19 pandemic sweeping through several countries in the West, crude prices have fallen in recent days and could fall further. If the trend holds, there could be positive gains for auto fuel consumers in India by way of a fall in the retail prices of petrol and diesel.
The country’s largest oil retailer IndianOil has said that retail product prices have remained static for about a month now as crude price fall in October was marginal at around $ 1 a barrel.
While the average price of crude for Indian refiners was about $41-41.5 a barrel in September, it stood close to $40 a barrel in October.
“Though a $1 per barrel fall in crude price did not reflect in retail prices of petrol and diesel in October, retail price of products may now fall as crude is further down to $38 a barrel and holding below $40 for some time,” said an official of the public sector oil marketing company.
OMCs in India have been holding on to the retail price of petrol and diesel for close to a month now. Even on Saturday, the price of two petrol products remained unchanged. With this, petrol prices have now been unchanged for over a month (39 days) now while diesel prices have been at the same level as on October 2.
The price of petrol in the national capital was at Rs 81.06 per litre. In Mumbai, Chennai and Kolkata, the fuel was sold for Rs 87.74, Rs 84.14 and Rs 82.59 per litre, respectively.
Diesel prices in Delhi, Mumbai, Chennai and Kolkata were at Rs 70.46, Rs 76.86, Rs 75.95 and Rs 73.99, respectively.
But with fresh indications on global oil prices, domestic oil companies could revise the retail price downwards. However, their margins would be protected as oil demand in the country has picked up lately getting over even the last years numbers.
Global crude prices are already down close to 10 per cent over the week with oil now selling close to $38 a barrel from earlier levels of over $ 42 per barrel. But with lower oil demand and rising inventory, there is fear among oil producing companies that crude prices may start falling again.
Retail sales have picked up with the gradual reopening of economic activities. Fot the first time since the lockdown, diesel sale in the country has crossed the pre-Covid level with the country’s most widely consumed fuel witnessing a nine per cent year-on-year growth in the first 15 days of October.
The surge in demand after months of subdued sales is the direct result of an increase in transport activities ahead of the festival season as consumers move out to make those necessary purchases.