International oil prices are touching close to $ 100 a barrel after Russian President Vladimir Putin sent troops into Ukraine, but petrol and diesel prices in India continue to be on freeze and are expected to rise once assembly elections in states like Uttar Pradesh end.
Amid fears of supplies being disrupted because of Russian aggression, the price of futures contract for Brent crude oil with April delivery on London’s ICE rose by 4.18 per cent to $ 99.38 per barrel on Tuesday morning, before paring some gains to settle just above $ 98 a barrel. The last time Brent exceeded $ 99 per barrel was in September 2014.
Russia makes up for a third of Europe’s natural gas and about 10 per cent of global oil production. About a third of Russian gas supplies to Europe usually travel through pipelines crossing Ukraine.
But for India, Russian supplies account for a very small percentage. While India imported 43,400 barrels per day of oil from Russia in 2021 (about 1 per cent of overall its imports), coal imports from Russia at 1.8 million tonnes in 2021 made up for 1.3 per cent of all coal imports. India buys 2.5 million tonnes of LNG a year from Gazprom of Russia.
Domestic fuel prices – which are directly linked to international oil prices – have not been revised for a record 110 days in a row. Rates are supposed to be revised on a daily basis but state-owned fuel retailers like IOC, BPCL, HPCL have frozen rates keeping assembly elections in Uttar Pradesh, Punjab and three other states in mind.
Currently, retail pump rates are aligned to a price of $ 82-83 per barrel and they are likely to go up once elections end next month. Petrol price had touched an all-time high of Rs 110.04 a litre and diesel came for Rs 98.42. These rates corresponded to Brent soaring to a peak of $ 86.40 per barrel on October 26, 2021. Brent was $ 82.74 on November 5, 2021, before it started to fall and touched $ 68.87 a barrel in December. Prices, however, started to rise thereafter and have risen by 12 per cent in February alone.