Petrol, diesel prices in India continue to rise as global crude prices hit 3-month highs
28 Sep 2021
State-run oil marketing companies (OMCs) increased the prices of petrol and diesel across the country after a pause of 22 days, as international oil prices continued to climb for a sixth day on Tuesday, reversing earlier losses, on fears over tight supply.
Brent crude futures gained $1.05, or 1.3 per cent, to $80.58 a barrel at 0645 GMT, after reaching its highest since October 2018 at $80.75 earlier in the session. It surged 1.8 per cent on Monday.
US West Texas Intermediate (WTI) crude futures rose $1.06, or 1.4 per cent, to $76.51 a barrel, the highest since 6 July. It jumped 2 per cent the previous day.
Indian OMCs increased petrol and diesel prices across all four metros on Tuesday. While petrol rates were hiked after a pause of 22 days, diesel rates advanced for the third straight day.
The revised prices of petrol and diesel stood at Rs101.39 and Rs89.57 per litre, respectively, in Delhi, as per Indian Oil Corporation, the country's largest fuel retailer. In Mumbai, the retail price of petrol mounted to Rs107.47 per litre on Tuesday while the price of diesel rose to Rs97.21 a litre.
State-run oil marketing companies such as Indian Oil Corporation Limited (IOCL), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) review the prices of petrol and diesel on a daily basis and any revision is implemented from 6 am in the morning.
Petrol and diesel prices in India are linked to the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.
Crude oil prices have reached a nearly three-year high as global output disruptions forced energy companies to draw more crude oil out of their stockpiles. Accordingly, US crude oil inventory levels are also nearing a three-year low, according to agency reports.
Hurricanes Ida and Nicholas, which swept through the U.S. Gulf of Mexico in August and September, damaged platforms, pipelines and processing hubs, shutting most offshore production for weeks.
Also weighing on supply, top African oil exporters Nigeria and Angola will struggle to boost output to their quotas set by the Organization of the Petroleum Exporting Countries (OPEC) until at least next year as underinvestment and nagging maintenance problems continue to hobble output, sources at their respective oil firms warn.
The OPEC+ group that curbed production in the past year to support prices when the SARS-CoV-2 pandemic hit demand, have failed to ramp up output to meet soaring global fuel needs as economies recover.
The supply issues follow the easing of pandemic-linked restrictions on movement by countries, potentially boosting demand.
Analysts also say rising prices of spot liquefied natural gas (LNG) and coal may support higher oil prices.
China, the world’s largest consumer, is in the grip of a power crunch as a shortage of coal supplies, tougher emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage.