Oil price fall at Global level will not affect price in domestic level
Last updated on February 9th, 2023 at 01:20 pm
Oil prices falls at global level that nobody would have ever-thought of: No Wolrd Leaders, No Political crisis, No Natural calamities was able to that but Corona Pandemic was able to. In the history of US oil trading, Monday(April 20,2020) will remain a nightmare because of the never-seen drop faced by the trade.
Oil price has fallen to lower rate which is never seen before, with the crude oil ending at negative $37.63 a barrel. The overall decline of the oil price is estimated about 305%, which is no near from 100%.
Being a highly populated nation, India imports large amount of oil from foreign nations but this fall in oil price may not affect the petrol and diesel prices in India. India imports the oil from Organisation of the Petroleum Exporting Countries (OPEC) block and there will be a fall in oil prices at domestic levelas there is fall in International level but only gradually.
Oil Price in Rupees
The slower reaction in the cost of oil is due to the difference of values between Rupees and Dollars that prevails. The oil trade between India and oil trading nations are carried out in the value of Dollars, which have higher value than Rupees is the reason behind this slower decline in oil price at domestic level.
India and Brent Oil
Brent Crude oil marker which is also known as Brent Blend, London Brent and Brent petroleum is the leading global price benchmark for Atlantic basin crude oils. Brent is used to set the oil price of two-thirds of the totally supplied world’s internationally traded crude oil. India imports crude oil from Brent Crude oil marker and Brent crude oil prices are stable upto the present scenario.
Read: COVID-19 positive case found in Rashtrapati Bhavan, 125 families quarantined
Indian Govt on oil price
Adding spice, Indian government will tabulate the oil price at domestic level inorder to avoid the reduction in the tax amount paid to state-run oil companies. This could even cause a sligth rise in retail cost for the consumers. The most popular retailed oils we use in India are petrol, diesel and kerosene; which are all refined oils. Thus,it is clear that there is an additional fee for processing, transportation, distribution and taxes are always added to the retail cost paid by the consumers. It is clear that, eventhough there is a fall in raw oil price, the refined will have it’s added cost to be paid by the consumers.
Analysts suggest that these kind of oil price fluctautaions in trading could occur again in the following months, since the fuel supply will be less than the fuel demand. The worldwide oil consumptions is approximately 100 million barrels per day and now it’s only 30% of 100 million from March,2020.
When the lockdown ends, there will be huge rise in the oil price!!