Petrol-diesel can be cheaper by Rs 3: Crude oil reached $ 92 per barrel in the international market

Crude oil (crude) prices in the international market have reached a 7-month low. Crude prices are currently at $ 92 a barrel and experts are predicting further cuts in prices. In such a situation, the price of petrol and diesel can be reduced by up to Rs 3 per litre in the coming days. Earlier in February, crude oil was close to $ 90 a barrel, which reached $ 125 a barrel in June.
According to Anuj Gupta, Vice President (Commodity & Currency), IIFL Securities, crude may come to $ 85 per barrel in the coming days. In such a situation, the prices of petrol and diesel may come down by Rs 2 to 3 per litre. According to Prashant Vashisht, Vice President and Co-Group Head of rating agency Icra, petrol and diesel prices in the country increase by 55-60 paise per litre when crude oil becomes costlier by $1 per barrel. Similarly, if there is a reduction of 1 dollar, the price of petrol and diesel also decreases by 55-60 paise per litre.
Crude prices in the international market were close to $125 a barrel in June, which reached $92 a barrel in the first week of September. Accordingly, crude has weakened by about 26%. The economies of China and many countries of Europe are under pressure. In such a situation, the demand for crude may remain weak going forward.
On 22 May, the central government reduced the excise duty on petrol and diesel, giving a big relief. Excise duty on petrol was reduced by Rs 8 and on diesel by Rs 6. Since then, there has been no cut in the prices of petrol and diesel and no increase in the prices. The latest prices of petrol and diesel in major cities of the country can be seen in this chart.
Till June 2010, the central government used to fix the price of petrol and it was changed every 15 days. After 26 June 2010, the government left it to the oil companies to decide the price of petrol. Similarly, till October 2014, the price of diesel was also fixed by the government, but from October 19, 2014, the government handed over this work to the oil companies.
At present, oil companies determine the price of petrol and diesel daily keeping in mind the price of crude oil in the international market, exchange rate, tax, transportation cost of petrol and diesel and many other things.
We procure more than 85% of our crude oil requirement from outside. We have to pay for it in dollars. In such a situation, due to the increase in the price of crude oil and the strengthening of the dollar, petrol and diesel start becoming expensive. Crude oil comes in barrels. One barrel means 159 litres of crude oil.