International crude oil prices shot above $120 a barrel for the first time in nine years on Thursday before retreating to $111, ICICI Securities said
International crude oil prices shot above $120 a barrel for the first time in nine years on Thursday before retreating to $111, ICICI Securities said
Petrol and diesel prices, which have been frozen for the past four months in light of general elections in states like Uttar Pradesh, need to be raised by more than £12 a liter by March 16 for fuel traders to break even, ICICI Securities said in a report.
International crude prices shot above $120 a barrel for the first time in nine years on Thursday before falling to $111 on Friday, but the gap between costs and retail prices has only widened.
As international oil prices – by which domestic fuel retail is directly measured – have soared over the past two months, government fuel distributors “need a massive £12.1 per liter price hike on or before March 16, 2022 just to… to break even and a price increase of £15.1 is required,” the company stressed after accounting for margins for oil companies.
The basket of crude oil that India buys rose to $117.39 a barrel on March 3, the highest since 2012, according to information from the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC). This compares to an average price of $81.5 per barrel for the Indian crude oil basket at the time of the gasoline and diesel price freeze in early November last year.
“With state elections over next week, we expect daily fuel price hikes to restart for both petrol and diesel,” JP Morgan said in a report.
