Brent crude hits $80; Diesel, Petrol prices reach five year high

As Brent Crude Creeps Around $80-Mark Indians Could Soon Feel the Heat

Pocket pinch: Fuel prices hiked again across India within 19 days

According to Indian Oil Corporation, the prices of petrol and diesel were increased by 28 to 31 paise per litre across cities like Mumbai, Delhi, Kolkata, and Chennai on Friday.

The previous highs in these cities were Rs 78.03 (Kolkata, August 2014), Rs 83.62 (Mumbai, September 2013) and Rs 79.55 (Chennai, September 2013) respectively.

As per reports, the hike in prices comes in the backdrop of increase in global crude oil prices, which are reportedly estimated to touch Dollars 100 for one barrel. Petrol prices have risen 98 paise and diesel by Rs 1.15 per litre in last 5 days. As per industry experts, the sharp rise in fuel prices can occur if state-owned retailers return to pre-Karnataka election status when fuel prices did not show any change for a number of days.

It is estimated that every $1 increase in crude price demands an increase of around 63 paise per litre in the prices of both diesel and petrol, and a Rs 1 depreciation against the dollar requires a 50 paise increase in the prices of these fuels. Diesel prices in Delhi also went up in equal measure as it breached the Rs 67-mark and stood at Rs 67.08.

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Speaking to THT Online, NOC spokesperson Birendra Goit said, "NOC has increased Rs 2 per litre in petrol, diesel, kerosene each within 15-kilometre distance in Kathmandu Valley from its depot".

The price hike projection is based on the assumption that global prices of diesel, petrol and rupee-dollar rate remain stable from hereon. The OMCs returned to daily price revision from May 14.

On the Last week, ICICI Securities had told that auto fuel net marketing margins were weak at Rs 0.31 a liter because of the no price hike post 24 April.

In the Union Budget 2018-19, the government had reduced the basic excise duty on petrol and diesel by Rs 2. They are estimated to have lost about Rs 500 crore on absorbing higher cost resulting from the spike in global oil rates and fall in rupee against the U.S. dollar.

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