New Delhi: Amid mounting public frustration over high fuel prices, there’s good news on the horizon as indications emerge of potential relief with expected reductions in the costs of petrol and diesel across the country.
According to the rating agency ICRA, there’s a possible silver lining for consumers grappling with the financial strain of elevated fuel prices. ICRA notes that the recent downturn in international crude oil prices, which dipped to $74 per barrel in September from previous highs of $83-$84 in March, sets the stage for a decrease in domestic fuel prices by Rs 2-3 per litre.
This potential reduction is supported by the current profit margins enjoyed by India’s oil marketing companies (OMCs). These government-controlled entities are reportedly operating at a comfortable profit level, with acquisition costs of petrol and diesel significantly above international product prices—Rs 15 and Rs 12 per litre, respectively. ICRA highlights that this fiscal positioning should allow OMCs to pass on these savings to consumers without incurring losses.
Fuel prices have remained static since March 2024, when they were last adjusted downwards by two rupees per litre in the run-up to the Lok Sabha elections. The stability in pricing, combined with favourable market conditions, suggests that further price reductions could be readily implemented.
Further influencing the global oil market, US crude oil production remains robust while geopolitical tensions and sluggish global growth have led to a decrease in oil prices. Moreover, OPEC and OPEC+ countries have extended their agreement to maintain reduced production levels, further easing price pressures.
This series of developments heralds potential cost-cutting measures that could ease the financial burden on ordinary consumers, offering a much-needed respite from the relentless rise in living costs. As the situation unfolds, stakeholders from various sectors will be keenly watching the impact of these adjustments on the broader economic landscape.
Comments are closed.