The Price Of Petrol And Diesel May Increase By Rs 12 A Liter

The price of petrol and diesel may increase by Rs 12 a liter. There is going to be a strong dose of inflation, after the election.

After the assembly elections in other states including Uttar Pradesh, the price of petrol and diesel may increase by Rs 12 per liter.

Petrol and diesel prices have been stable for the last four months.

International crude oil prices rose above USD 120 a barrel for the first time in nine years on Thursday and eased slightly to USD 111 on Friday, but the gap between cost and retail rates widened.

ICICI Securities said in a report that there is a need to increase the prices by Rs 15.1 after including the margins for the oil companies.

According to information from the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry, crude oil purchases in India increased to $117.39 a barrel on March 3, the highest since 2012.

This is compared to the Indian basket of crude oil’s average of $81.5 per barrel at the time of freezing petrol and diesel prices in early November last year.

“We expect daily fuel prices to increase in both petrol and diesel once the state elections are over next week,” JP Morgan said in a report.

The seventh and final phase of voting for the Uttar Pradesh Legislative Assembly is on March 7 and the counting of votes will be held on March 10.

The auto fuel net marketing margin stands at minus Rs 4.92 per liter as of March 3, 2022, and Rs 1.61 in Q4 FY22, said ICICI Securities.

However, the net margin on the new international auto fuel prices is likely to be minus Rs 10.1 per liter on March 16 and minus Rs 12.6 per liter on April 1.

Oil prices have skyrocketed since Russia last month deployed its troops along the Ukrainian border. Russia produces a third of Europe’s natural gas and about 10 percent of global oil production.

About a third of Russian gas supply to Europe is usually through pipelines crossing Ukraine. But for India, the percentage of Russian supply is much less.

While India imported 43,400 barrels of oil per day from Russia in 2021 (about 1 percent of its total imports), Russia’s 1.8 million tonnes of coal imports in 2021 accounted for 1.3 percent of all coal imports.

Domestic fuel prices are directly linked to international oil prices, as India imports 85 percent of its oil needs.