Crude oil price: Very good news for India. Crude oil prices are expected to go down sharply in October.
Saudi Arabia, one of the world’s largest crude oil-producing countries, is considering reducing the prices of almost all grades of crude oil sold to Asia. This will reduce the prices of petrol and diesel in India.
3 out of 5 refining sources have also given information about this.
There is scope for a reduction in the prices of petrol and diesel due to an increase in the profits of oil companies.
There may be relief from the high price of petrol and diesel before the assembly elections in Maharashtra and Haryana. At present, the price of petrol in many cities of the country is more than Rs 100 while diesel is also around Rs 90.
India’s crude oil procurement cost is affected by the price of benchmark Brent crude. On Wednesday, its price stood at $ 73.58 per barrel. Its price fell 5% on Tuesday, hitting a record low this year. China’s weak consumption has contributed significantly to the fall in crude oil prices.
According to experts, oil prices are under pressure from the possibility of increased supply due to Libya’s return to the market, the OPEC+ group’s October voluntary production limit, and increased production from non-OPEC sources. The continuous fall in oil prices has pushed up the margins of fuel retailers, especially state-run oil marketing companies. These companies account for 90% of the domestic market.
The government cut petrol and diesel prices by Rs 2 per liter on March 14, just before the general elections. This was the first cut in the price of petrol and diesel since May 2022.
The continuous fall in oil prices has pushed up the profit margins of fuel retailers, especially state-run oil marketing organizations. In the domestic market, these businesses account for 90% of the market. The government cut petrol and diesel prices by Rs 2 per liter on March 14, just before the general elections. There has been no reduction in the price of petrol and diesel before this since May 2022.
Despite this reduction, state-owned enterprises made an estimated profit of more than Rs 2 per liter in April, according to research published by Motilal Oswal Financial Services in April. At that time, the price of a barrel of crude oil for the Indian basket averaged $89.44. Given that it averaged $76 in September, it should have increased even more by now.
However, it is still unclear whether the government will reduce the price of petrol and diesel. Financial services corporation UBS has bet on the limited supply of the oil market. It says that the price of crude oil is likely to remain erratic shortly.
In addition, Goldman Sachs has forecast that it will remain between $70-85 per barrel. Even if the current low prices end quickly and come down to $85, the government will be in a good position. As a result, it can request government retailers to maintain the price of petrol and diesel at a stable level.
(With input from agencies)