Good news for motorists: Petrol and diesel prices likely to drop sharply

New Delhi : Due to fall in crude oil prices in the international markets, petrol and diesel prices are likely to fall by Rs. Brent crude oil prices in markets have been falling since January and are currently below $81 per barrel. The price of US crude oil is around 74 dollars per barrel. Oil prices for the ‘Indian basket’ have gone up to $82 per barrel due to a sharp drop in crude oil prices. It was at $112.8 in March. This means that the prices of crude oil useful in the domestic market have decreased by 31 dollars in eight months.

According to ‘SMC Global’, if the price of crude oil drops by one dollar, oil distribution companies save 45 paise per liter in the refining process. According to this calculation, there is a need to reduce the prices of petrol and diesel by Rs. 14 per litre.

Why the fall in rates?

– Anti-ruling protests intensify in China and Covid restrictions increase.

– Arrival of Russia in the international market despite sanctions.

– Slowdown of global economy due to increase in interest rates.

Why the drop in fuel prices?

1) Cost savings for oil distribution companies

At present, considering the prices of petrol and diesel in the country, the crude oil price of ‘Indian basket’ needs to be 85 dollars per barrel. However, this rate is currently at $82. Therefore, oil distribution companies are saving Rs 245 per barrel (159 litres) of refining.

2) Reduced loss of companies

According to the information given by Petroleum Minister Hardip Singh Puri, government oil companies are making profit from the sale of petrol. On the other hand, diesel sales are incurring a loss of Rs 4 per litre. Brent crude oil has fallen by 10 percent since January. So companies are also benefiting from diesel sales.

3) Crude oil to 70 dollars

According to petroleum sector expert Narendra Taneja, the price of Brent crude oil is falling and it is moving towards 70 dollars per barrel. Although crude oil prices are falling, fuel prices will take time to come down. It takes 3 days from import to clearance. Therefore, after the fall in the price of oil in the international market, its effects are visible every month.

85 percent of oil requirement is imported

85 percent of the country’s total oil requirement is imported. It is necessary to pay the price of imported oil in dollars. In addition, if the price of oil rises and the dollar strengthens, there is a fear of an increase in the price of fuel.