Petrol, Diesel Prices In India Cut As Coronavirus Sinks Global Crude Oil Prices

On Monday, retail prices of fuel were lowered by state-owned retailers as international oil prices touch multi-year lows amid concerns of a slowdown in economic activity due to coronavirus outbreak.

Petrol prices per litre were cut by 22-23 paise to Rs 71.49 in New Delhi, Rs 74.16 in Kolkata, Rs 77.18 in Mumbai and Rs 74.35 in Chennai.

Diesel prices per litre were lowered by 20-21 paise to Rs 64.10 in New Delhi, Rs 66.43 in Kolkata, Rs 67.13 in Mumbai and Rs 67.71 in Chennai.

Domestic fuel prices have been declining for a week now. A sharp drop of 17 paise and 21 paise (per litre) on petrol and diesel price, respectively, was observed on Sunday as well. These rates are revised on a daily basis by public-sector retailers like IOC and HP based on international oil prices and rupee's exchange rates.

International oil price benchmark, Brent crude, fell sharply to $48.40 a barrel on Monday, the lowest since July 2017. US West Texas Intermediate crude hit a 14-month low of $43.32 per barrel.

Second death from coronavirus was reported in the United States on Monday. Following the first death on Saturday, the Trump administration announced additional travel restrictions affecting Iran, Italy and South Korea. Infections from the deadly virus have been confirmed in countries as far as Brazil.

As panic continues to rise, more and more countries are imposing travel restrictions to contain the spread of infection. These travel restrictions, shut down of stores and manufacturing in parts of China and South Korea have been posing a threat to the world economy. As economic activity falls, so does the demand for fuel.

On Saturday, China reported its worst ever fall in factory activity for the month of February. Fall in manufacturing activity in the second-biggest economy in the world and the largest oil importer has negative implications on crude oil demand and its hence its price.

Last week was reportedly the worst week for oil prices since 2008 causing stock markets of oil-rich Gulf countries to tank on Sunday.