International oil prices, which have skyrocketed since Russia invaded Ukraine, have risen about $40 a barrel in just over a week.

After staying above $100 a barrel for two weeks, international oil prices fell to $99.84 on Tuesday, easing margin pressure on fuel retailers that maintained gasoline and diesel prices despite a spike in raw material costs.

The price of Brent crude, which soared above USD 100 a barrel on February 28 and hit a 14-year high of USD 139 a barrel on March 7, fell more than 7 percent on Tuesday. The market has been rocked by a resurgence of virus cases in China, which could affect demand at the world’s largest crude oil importer, and signs of progress in ceasefire negotiations between Ukraine and Russia.

International oil prices, which have skyrocketed since Russia invaded Ukraine, have risen about $40 a barrel in just over a week.

For India, the drop in the oil price is good news as it will lower the import bill of the world’s third largest oil importer.

It will also ease margin pressure on state-owned fuel retailers, industry sources said.

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not changed petrol and diesel prices for 131 days. This is despite the fact that raw material costs jump above 60 percent.

The companies were expected to end the election-related fuel price freeze once polls in five states, including Uttar Pradesh, ended last week, but they continued to keep tariffs on hold so as not to give the opposition any problem. to the government in the second half of Parliament’s budget session that began Monday.

“The fall in the price of crude oil is certainly a welcome sign for oil companies,” said a senior official. “They lost Rs 12-13 per litre, disregarding the marketing margin, on sales of petrol and diesel. That’s coming down now.” International oil prices were around USD 81 when companies hit the freeze button on November 4.

Oil Minister Hardeep Singh Puri told the Rajya Sabha on Monday that the price of petrol and diesel in the store or in the bunk is determined by the international price, insurance costs, freight, exchange rate, refining margins and a number of other factors.

“Oil marketing companies will make their decisions (about fuel prices). They will continue once they can no longer bear it. If they don’t have the margin or the cushion, they’ll take the right step,” he said, denying the suggestion that the companies kept prices on government instructions so as not to spoil the election prospects of the ruling BJP in five states. went to the polls.

On November 4, 2021, the excise duty on petrol was cut by Rs 5 per liter and on diesel by Rs 10 to provide relief to consumers reeling under record high prices. All but nine states had also reduced local sales tax or sales tax.
“We are ready to take the necessary steps to control the price,” he said.

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