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Rating agency ICRA has recently released a report, which states that the reduction in crude oil prices is likely to reduce the prices of petrol and diesel in India by Rs 2 to Rs 3 per liter. The average price of crude oil imported by India in September 2023 was US$ 74 per barrel, while in March it was $ 83-84 per barrel. This decline has helped increase profits for public-sector petroleum companies.
Petroleum companies' profits rise.
ICRA reported that marketing profits on retail sales of automotive fuels for Indian petroleum marketing companies (OMCs) have moved towards improvement in recent weeks. The report also said that petrol and diesel prices were last cut by Rs 2 per liter on March 15, 2024. At this time, the net realization of OMCs has been higher by Rs 15 per liter for petrol and Rs 12 per liter for diesel.
Reduction is possible if prices remain stable
ICRA Senior Vice President Girish Kumar Kadam said that if crude oil prices remain stable at the current level, there is still scope for a reduction in retail prices of petrol and diesel. At present, no change has been made in the retail selling price of fuel, which may provide relief to the customers.
Global Factors: OPEC+ Production Policy
A major reason for the fall in crude oil prices is the decline in global economic growth and the increase in oil production in the US. Along with this, OPEC and allied countries (OPEC+) have extended their production cuts for two months to deal with falling prices.
Possible relief
If the prices of crude oil remain stable at this level, it can be a cause of relief for the general public. This will not only reduce the transportation cost but will also have a positive impact on the prices of other commodities. Consumers are expected to benefit a lot from this situation.
