Petrol prices have slid globally amidst the upheaval in the oil market following the sanctions on Iran and increased output from OPEC as well as America. With the prices for Brent crude hitting the $50 range after peaking at about $74 about a couple of months ago, the prices in India have also reduced from the all-time high they had hit in October.
With global prices escalating, the deregulated petrol and diesel prices in the country ventured into uncharted territories. Petrol had crossed Rs 90 per litre in Mumbai while diesel rallied beyond Rs 80 for the first time ever, forcing the central government to slash the central excise duties. The oil marketing companies also had to take a hit to contain public outcry.
The global oil prices had risen as the sanctions on Iran from 1 November led to speculations of production shortage. America and OPEC did boost their output to rein in the global oil prices and then the subsequent relaxation of sanctions for countries, especially like India to import oil from Iran resulted in a market surplus leading to the reduction in crude price. America, with OPEC and Russia, seems to be working towards keeping oil in the $50 range globally, which means we can expect the local prices to stay at the current levels at least for some time.
The retail fuel prices in India, though, haven’t reduced in proportion to the global prices. This indicates at a possible trench being created by the oil marketing companies to form a buffer in case the oil prices increase again.