During the last few days, petrol and diesel rates in India have risen significantly in the face of a strong increase in foreign crude oil markets and low rupee-dollar exchange rates. The price of petrol has risen by approximately Rs 2.14 per litre in the past four days, whereas the cost of diesel has risen by Rs 2.23. Petrol and diesel rates may rise more in the coming months as oil firms try to retrieve losses. Another factor behind the increase is a rapid rebound in global crude oil prices over the past few days.
A few sources claim that if global crude oil prices continue to develop and the rupee remains poor, prices for petrol and diesel may rise further. You must have known that international crude oil prices and rupee-dollar exchange rates are essential factors when considering daily prices used by PSU oil firms. The latest rise in international oil prices coupled with the poor currency which means India will need to spend more on oil procurement.
That's why Indian Oil Companies have handed the hike on to customers, and customers may need to pay out more if the global oil market outlook is further increased. But it remains uncertain if the price of oil may continue to rise because the leading oil companies are still cautious of an oil crisis. Many oil market monitoring experts and researchers assume the principles continue to deteriorate, and prices may fall again because of lower demand. They believe that the market will only recuperate if the demand for oil rises.
Studies also indicated that global oil companies should not consider taking the sharp rebound on the oil market as a trigger to improve productivity, as it would once again give rise to a shortage of supply.
Although India's oil and diesel rates are expected to rise as a result of the global breakaway, oil markets are likely to collapse again as a result of lower availability. In such a situation, diesel and petrol prices may drop once again.
However, the lower global oil prices would result in a drastic drop in India 's fuel prices as state governments can impose an additional charge on petrol and diesel in the midst of the current coronavirus economic crisis.
About the Author
Vipul Das is writing Business and Finance related articles over the years for goodreturns. He has done BCA and has significant experience in the banking and finance sectors.