No relief in petrol prices as Brent trades at a three-year high of $83.86

Petrol prices are ruling at record high levels. Though the daily revision in fuel prices was halted on Tuesday, prices are most likely to soar further as benchmark Brent crude has surged to $83 per barrel level.

The OPEC+’s decision not to boost supply by more than 0.4 million barrels per day is cited as the reason for surge in Brent prices.

Brent crude was trading 0.3% higher at $83.86 on Tuesday morning, the highest in three years, after rising 1.5% on Monday.

Petrol is sold at Rs 104.44 per litre and diesel at Rs 93.17 per litre in the national capital, unchanged from Monday. On Tuesday, retail rates in India’s financial hub Mumbai stayed unchanged at Rs 110.41, the highest among the four metro areas. In Mumbai, one litre of diesel costs Rs 101.03.

According to a Business Standard report, a “substantial” rise is in the works to bridge the cost-sale price discrepancy.

Crude oil prices

Crude oil prices have a direct impact on fuel prices. Following OPEC’s steadfast refusal to boost supply by more than 0.4 million barrels per day, the worldwide benchmark Brent crude has risen substantially. This is why fuel prices are being raised by a wider margin.

OMCs had preferred to keep a close eye on the global oil situation before making any changes, but significant volatility in global oil price movements has now compelled OMCs to implement the hike.

OMCs examine and update petrol and diesel rates on a daily basis, and the new prices go into effect at 6 a.m. The daily price review and modification is based on the average price of benchmark fuel in the worldwide market over the previous 15 days, as well as foreign exchange rates.

Because of variations in global oil prices, OMCs have been unable to fully implement this methodology, and revisions are increasingly being made with larger gaps. This has also prevented companies from raising fuel costs anytime there is a discrepancy between the global arrival and the pump price of petroleum.