Petrol and diesel prices stayed relatively unchanged across major Indian cities on August 22, even as global crude oil prices continued to climb amid heightened tensions between the United States and Iran. The domestic fuel prices remain fairly stable during a sharp weekly rise in international oil benchmarks, and this gives some relief to consumers and businesses.
Brent crude oil prices have reached $ 93 per barrel levels this week and were heading toward a weekly gain of more than five percent. Crude oil prices of the West Texas Intermediate (WTI) and average oil prices of the Brent crude oil and WTI are at $86 per barrel.
The rise in global oil prices has been largely driven by fears of disruption in crude supplies. That uncertainty in the world energy markets has been compounded by the tension between Washington and Tehran, and traders are closely watching diplomatic developments and the possibility of further economic sanctions against Iran.
However, in India’s top cities, despite the increase in global crude prices, there was no major change in retail petrol and diesel prices on August 22. Domestic fuel prices are influenced by a number of factors, including crude oil prices, refinery costs, transportation expenses, currency movements and central as well as state taxes.
Petrol prices on August 22
According to the rates provided for August 22, petrol prices in major Indian cities are:
Delhi: Rs 102.12 per litre. Mumbai: Rs 111.21 per litre. Kolkata: Rs 113.51 per litre. Chennai: Rs 108.01 per litre. Hyderabad: Rs 115.73 per litre. Bengaluru: Rs 110.89 per litre.
Among the cities listed in this study, the highest petrol price was in Hyderabad at Rs 115.73 per litre, while Delhi had the lowest rate of Rs 102.12 per litre.
On August 22, diesel prices
Diesel prices in the major cities were at:
- Delhi: Rs 95.20 per litre.
- Mumbai: Rs 97.83 per litre.
- Kolkata: Rs 99.82 per litre.
- Chennai: Rs 99.66 per litre.
- Hyderabad: Rs 103.82 per litre.
- Bengaluru: Rs 98.80 per litre.
Hyderabad also recorded the highest diesel price among the cities listed, while Delhi continued to have the lowest rate.
Why are global oil prices rising?
The recent rally in crude prices is closely linked to geopolitical uncertainty. The market has grown more concerned about the possibility of supply disruptions as tension between the United States and Iran escalates.
Brent crude rose to $93.99 after being around $90.99 yesterday, and WTI held onto recent gains. If any production, exports, or shipping routes are disrupted, the market would be particularly sensitive to developments involving the largest oil-producing countries.
The fact that a June memorandum of understanding between Washington and Tehran has expired without an extension has raised questions about its permanence and has also raised concern among Iranian officials that Tehran will be more aggressive if talks between Washington and Tehran fall apart.
Impact on India
India is particularly sensitive to changes in international crude prices because the country imports more than 85% of its crude oil requirements. A prolonged period of high oil prices could increase India's import bill and put pressure on the rupee against the US dollar.
Higher crude prices may also affect transportation and logistics costs. If the increase continues, then businesses could eventually see a rise in operating costs; therefore, the price for goods and services would be higher.
But domestic petrol and diesel prices do not necessarily respond immediately to every movement in international crude prices. Retail rates are affected by pricing mechanisms, refining margins, freight expenses, exchange rates and taxation.
For consumers, the stability has meant there has so far been no immediate broad-based rise in fuel prices at petrol stations across the board, despite the global crude rally. Motorists in Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Delhi can therefore continue to consider local rates when they plan for their fuel costs and thus can still use them as a guide for their fuel expenses.
The key factor to watch in the coming days will be the direction of global crude prices and US-Iran relations. If geopolitical tensions remain high and oil prices remain high, then India’s import costs and domestic inflation could also be hurt.
Let us see, however, that petrol and diesel prices in the large Indian cities remain fairly stable even as the global oil market confronts ongoing supply challenges.
Comments
Please to leave a comment on this article.