International crude oil prices fall below $100 a barrel after more than a fortnight

After staying above $ 100 per barrel for two weeks, international oil prices fell to $ 99.84 a barrel on Tuesday, easing margin pressure on fuel retailers who have been holding petrol and diesel prices despite a spike in the cost of raw material.

Brent crude oil prices, which soared past $ 100 per barrel on February 28 and touched a 14-year high of $ 139 per barrel on March 7, fell over 7 per cent on Tuesday. The market was rattled by a resurgence of virus cases in China, which may impact demand in the world’s biggest crude importer, and signs of progress in cease-fire talks between Ukraine and Russia.

International oil prices, which shoot up since Russia invaded Ukraine, have swung about $ 40 per barrel in little more than a week.

For India, the fall in oil prices is good news as it will lower the import bill of the world’s third-biggest oil importer. Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) haven’t changed petrol and diesel prices for a record 131 days. This, despite the cost of raw material jumping over 60 per cent.

India’s oil Minister Hardeep Singh Puri told the Rajya Sabha that the price of petrol and diesel at the retail point or at the bunk is determined by international price, cost of insurance, freight, exchange rate, refining margins and a number of other factors.

“Oil marketing companies will take their decisions (on fuel prices). They will proceed once they can no longer bear it. If they don’t have the margin or cushion, they will take the appropriate step,” he had said as he denied suggestions that the firms were holding the prices on government instructions so as not to spoil the ruling BJP’s electoral prospects in five states that went to polls. On November 4, 2021, excise duty on petrol was cut by Rs 5 per litre and that on diesel by Rs 10 to provide relief to consumers reeling under record-high prices. All but nine states had also cut local sales tax or VAT.

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