Crude slides, but no big respite for consumers yet

Vijay C Roy

Tribune News Service

Chandigarh, March 15

On March 9, when the Brent crude plunged 33 per cent to touch $33.20 a barrel, the retail consumers were anticipating that the petrol and diesel prices will come down sharply. However, they are yet to reap the benefits of low crude prices. On Sunday, the oil marketing companies, announced to cut petrol price by 12 paise a litre and diesel by 14 paise. Petrol in Chandigarh now costs Rs 65.97 a litre, while diesel is priced at Rs 59.45, according to data provided by the Indian Oil Corporation. On March 9, petrol was sold at Rs 66.76 and diesel at Rs 60.23 a litre.

A senior official in an oil marketing company said petrol and diesel prices were being cut by 10-30 paise almost every other day after crude rates plunged. Since retail prices of the day are based on average price of benchmark international fuel for the preceding fortnight, so the drop in prices gets reflected in retail prices over the next 8-12 days.

He added that the small dip in oil prices was because the oil companies also factored in the excise duty hike of Rs 3 a litre effected on Saturday.

With OMCs absorbing the excise duty hike, petrol and diesel prices may not come down as sharply as expected, sources say.

According to analysts, the spread of coronavirus and crash in oil prices presented a special case to provide consumers with substantially lower prices. “However, instead of providing fuel at cheaper rates, the government is more concerned about its deficit as its revenue has been impacted by slowdown,” said a petrol station dealer.

Analysts believe petrol, diesel prices should be reduced sharply by Rs 4-5 a litre in view of the sharp decline in crude prices.