A surge in international oil prices could translate into an increase in the retail price of gasoline and diesel in India as oil companies face extreme margin squeeze, sources said.
Gasoline and diesel prices remained unchanged for 12 days, but now soaring international rates are putting pressure. Current prices for gasoline and diesel on the international market are about $ 4-6 per barrel higher than average prices in August. However, no increase in retail prices has been affected by oil companies so far, sources said.
If international prices stay at that level, petroleum marketing companies (OMCs) will have to raise retail prices for gasoline and diesel, they said. Retail prices for gasoline and diesel were last hiked on July 17 and July 15, respectively.
Petrol in Delhi currently costs Rs 101.19 per liter and diesel is priced at Rs 88.62 per liter. Average international crude oil prices fell more than $ 3 a barrel in August from the previous month. It happened amid mixed economic data from the United States and China and mobility restrictions in Asia fueled by the rapidly spreading Delta variant.
As a result, retail gasoline and diesel prices in the Delhi market were reduced by Rs 0.65 per liter and Rs 1.25 per liter by oil marketing companies from July 18. The last downward revision dates back to September 5. However, with the latest developments in the international market, crude oil prices have started to rise steadily since the last week of August.
North American crude oil production shutdowns following a fire on Mexico’s offshore platform and disruption from Hurricane Ida on the US Gulf Coast sparked a sharp rise in oil prices . Ida, the worst storm to hit the U.S. Gulf Coast since Hurricanes Katrina and Rita in 2005, could result in a total loss of crude supply of up to 30 million barrels, according to the IEA.
In addition, the decline in crude oil inventories in the United States and expectations of improving demand have also contributed to the recent surge in prices. OPEC, in its monthly oil market report for September, maintained a forecast for growth of 6.0 million barrels per day in global oil demand for 2021. According to OPEC, the increase in oil rates. vaccination and sustained economic developments in major economies are expected to support demand for crude oil.
For the fourth quarter of 2021, global oil demand is expected to increase by 1.24 million barrels per day from the third quarter of 2021. For 2022, OPEC predicts that oil demand will reach 100.8 mb / d, exceeding pre-pandemic levels. Even as the IEA says it is optimistic about rising vaccination rates and a likely improvement in demand prospects, international oil prices could remain firm in the near term, sources said.