OMCs hold fuel prices revision despite strong crude

Oil marketing companies (OMCs) did not revise the retail prices of petrol and diesel on Wednesday even though global crude has remained firmly close to $44 a barrel.

So, petrol price in the national capital continues to be 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 Rs 70.46, Rs 76.86, Rs 75.95 and Rs 73.99 respectively.

With no revision on Wednesday, petrol prices have now remained at the same level for 57 days while diesel prices have been at the same level for 47 days.

However, the sharp firming up of crude prices has changed the dynamics. The average price of crude for OMCs in October was around $40 a barrel, just a tad lower than the previous month. Thus, the companies did not revise auto fuel prices as the differential was very low. But crude average on the first fortnight of November is close to $43 a barrel.

Every dollar increase in price of crude results in retail price of petrol and diesel to be increased by up to 40 paise per litre. This would mean that the fuel prices should be up by at least Rs 1.20 per litre by now.

However, oil companies have kept fuel prices static even when there was a need to revise it downwards last month. That saving would prevent OMCs from increasing petrol and diesel prices by a higher margin and changes could only be moderate.