On Saturday, fuel prices were unchanged for the twelfth straight session by state-owned oil retailers amid a 21-day lockdown in the country and a sharp correction in international oil prices.
Petrol price per litre stood at Rs 69.59 in New Delhi, Rs 72.29 in Kolkata, Rs 75.30 in Mumbai and Rs 72.28 in Chennai. Diesel price per litre remained at Rs 62.29 in New Delhi, Rs 64.62 in Kolkata, Rs 65.21 in Mumbai and Rs 65.71 in Chennai.
In the international market, oil prices plunged 5 percent on Friday, ending with fifth consecutive weekly losses as demand was disrupted by travel restrictions imposed by many countries to curb the spread of COVID-19 pandemic.
Brent crude and US WTI, settled at $24.93 and $21.51 per barrel, respectively. The two international benchmarks were down nearly two thirds this year as the coronavirus-related slump in economic activity and fuel demand has forced investment retrenchment in oil and energy companies.
After Prime Minister Narendra Modi declared a 21-day lockdown across India, there has been a sharp decline in domestic fuel demand causing companies to cut crude refining as their storage tanks are full to the brim.
According to a Reuters report citing sources, Indian Oil Corp (IOC), has reduced its crude processing by 30 to 40 percent and shut its naphtha cracker plant in northern India "to avoid tank top-up situation."
"...circumstances arising out of COVID-19 outbreak are beyond our control ...all of which adversely impact the performance of our obligation," said IOC in its force majeure letter to its Middle Eastern crude suppliers letter, as seen by Reuters.
Further, Mangalore Refineries and Petrochemicals Ltd (MRPL) has already shut a third of its 3 lakh BPD (barrels per day) refining capacity and is preparing to shut the remainder next week as demand slumped, the report said.
Meanwhile, in the Finance Bill 2020 passed in the Parliament this week, the Finance Ministry made amendments to raise special additional excise duty on petrol and diesel to help generate income and take advantage of the slump in oil prices. Duties were increased from Rs 10 to Rs 18 per litre of petrol and from Rs 4 to Rs 12 per litre of diesel.