After the tenth consecutive price hike by the state-owned retailers today, fuel prices have reached new all-time highs across all metro cities. They have not seen a day of decline since 16 August.
Petrol price per litre was at Rs 79.31 in Delhi, Rs 86.72 in Mumbai, Rs 82.22 in Kolkata and Rs 83.41 in Chennai. Diesel per litre was priced at Rs 71.34 in Delhi, Rs 74.29 in Kolkata, Rs 75.74 in Mumbai and Rs 75.39 in Chennai.
Fuel prices are set based on international crude oil prices and taxes imposed in the city of sale have been hurt by global supply uncertainties. US oil prices broke the $70 per barrel mark on Tuesday after Anadarko Petroleum Corp evacuated and shut production at two oil platforms in the northern Gulf of Mexico in preparation for a hurricane.
Additionally, a stronger dollar has made imports of oil expensive for India. Even in cities like Delhi where state tax implications are low, the fuel prices are heading to new all-time highs every day.
Barclays in a statement said that international crude oil "prices could reach $80 and higher in the short term", as an increase in production from oil producers cannot suffice the demand it is expected to receive. This means that relief to Indian consumers can only come from reduced taxes on fuel.
Meanwhile, although many international shippers have stopped loading Iranian oil due to the US sanctions that are to be imposed on it from November, India has allowed its state refiners to import Iranian oil if Tehran arranges and insures tankers, a Reuters report said.
The country is following the footsteps of China where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC). This will mean that two of the largest oil consumers in the world have chosen to continue making Iranian oil purchases despite pressure from the US.