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Gasoline at 200 yen per liter? Russia says global crude could hit $300


The basket of crude oil purchased by India has exceeded $126. It was at $81.5/barrel when gasoline and diesel prices froze 4 months back.

Via Automatic table HT
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Update on:
March 9, 2022, 09:09 am

File photo of a person pumping fuel into his passenger car.  (REUTERS)
File photo of a person pumping fuel into his passenger car. (REUTERS)

The rapidly rising crude oil prices in the global market could reach unprecedented levels in the near term as the Russia-Ukraine conflict continues. And with the US banning imports of Russian oil, Moscow has warned that such bans could push the price of oil per barrel to as much as $300. Obviously, this will have extremely severe implications for countries around the world, including India, which imports almost 85% of its oil needs.

Brent crude oil prices touched $135 a barrel on Tuesday, up from $77 earlier this year. And there is no indication that the exchange rate flight will be seized anytime soon. Russian Deputy Prime Minister Alexander Novak said: “It is clear that the refusal of Russian oil will have dire consequences for the global market. “The price increase will be unpredictable. If not $300 a barrel would be $300 a barrel.”

The basket of crude oil purchased by India has exceeded $126. It was at $81.5/barrel when gasoline and diesel prices froze 4 months back.

Current rates and trends are posing a major challenge to the global economies. In India, petrol and diesel prices were flat for 4 months but a rally – and a significant one – is expected in the coming days. A report by ICICI Securities says that gasoline and diesel prices must rise more than 12 liters for breakeven OMCs. This means that the price per liter of petrol in Delhi, for example, would again breach the triple-digit mark. It is in 95.41 a liter current. In other metropolitan cities such as Mumbai, Kolkata and Chennai, the rate is already in triple digits and will increase further.

But if global crude prices double, as Novak warns, this could more than double the price of gasoline per liter in India and other parts of the world. And while the cost per liter of fuel in India also depends on central and state taxes, the reduced value of the INR against the Dollar doesn’t exactly help the matter either. An official at fuel retailer PSU told PTI news agency that the situation is being carefully monitored. “We are monitoring the situation closely,” he said. We need to see if the current spike in international oil prices is a temporary phenomenon or is here to stay.”

Date of first publication: March 9, 2022, 09:09 AM IST



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