In line with international crude prices, India's crude oil basket has surged above the Rs 6000 level, increasing calls from oil marketing companies for a hike in petrol prices.
Crude oil price increase was quite pronounced in the last few days, led by a surge in global crude prices. India's crude oil basket crossed Rs 6000 mark on August 7, up from Rs 5891.47 per bbl on August 6.
The rise has been on account of not only a rise in international prices of crude, but also on account of the steady depreciation of the rupee.
A surge in prices of crude does not augur well for India, which imports up to 70% of its crude requirements. Rising crude prices, puts a strain on the fiscal deficit, since LPG, Kerosene and Diesel are regulated fuels.
Though petrol prices are largely de-regulated oil marketing companies do seek the government's nod before effecting a hike. These companies are now demanding a Rs 3 hike in petrol, as there are under recoveries in this fuel.
Crude oil is expected to surge even further, owing to bullish trend in commodities, fuelled largely by monetary easing around the globe.