Oil prices touch a 7 month low

12 Sep 2022 , 09:08 AM

Despite oil prices touching a 7 month low, India’s state-owned fuel retailers have not cut down prices.

The price of international benchmark Brent crude this week fell below USD 90 a barrel for the first time since early February as demand declined due to recessionary concerns. It has now recovered and is sold for USD 92.84 a barrel, which is the lowest price in the preceding six months.

Prices fell sharply in spite of discouraging news like Russia’s decision to keep the North Stream pipeline offline and output curbs by the producer cartel OPEC and its allies (OPEC+). The retail prices for gasoline and diesel in India, which have been frozen for a record-breaking 158 days, have not changed due to this.

When asked about the lack of a revision by reporters on Friday, Oil Minister Hardeep Singh Puri made an effort to compare the absence of one to the losses state-owned gas stations suffered by keeping prices even as global oil prices rose to multi-year highs.

The average cost of the crude oil that India purchased was USD 88 per barrel on September 8. Prior to rising to USD 109.51 in May and USD 116.01 in June, its monthly average had been USD 102.97 in April. Prices started to drop in July when the Indian basket averaged USD 105.49 per barrel. In August, it averaged USD 97.40, and thus far in September, it has averaged USD 92.87.

Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), state-owned fuel retailers, have chosen not to exercise their right to adjust the retail selling price of gasoline and diesel in accordance with international costs for more than five months in order to help the government control runaway inflation.

For feedback and suggestions, write to us at [e-mail]