Petrol, diesel prices: Cheaper drive ahead, fuel rate slashed by Rs 8.40, Rs 4.46 respectively in 30 days

US benchmark dollar index has its share of torturing the fuel prices in the country. There were moments where a petrol was over Rs 91 per litre and diesel above Rs 88 per litre, hitting the pockets of citizens. However, tables have turned and the current situation looks quite better than September to October 2018 month, so much so, that crude oil will now turn out to be a saviour in reducing our petrol and diesel prices.

Today petrol reaches Rs 77.43 per litre in New Delhi low by 0.13 paisa from the previous close which was Rs 77.56 per ltr, Image source: PTI

In India, petrol prices are revised by the oil marketing companies like Indian Oil, BPCL and HPCL based on international prices. It has become more than a year now, since the Oil ministry gave up the traditional method of deriving fuel prices, instead linked it with daily revision alongside the movement with crude oil prices. The Brent crude which has been boiling since the start of this year has become a nightmare for Indian citizens as they have to pay petrol and diesel prices that are at all-time highs.

It needs to be noted that, international crude oil price influences the petrol and diesel price in India. Additionally, the depreciating Indian rupee against the US benchmark dollar index has its share of torturing the fuel prices in the country. There were moments where a petrol was over Rs 91 per litre and diesel above Rs 88 per litre, hitting the pockets of citizens. However, tables have turned and the current situation looks quite better than September to October 2018 month, so much so, that crude oil will now turn out to be a saviour in reducing our petrol and diesel prices.

Customers were on a whole new roller coaster ride when it came to buying petrol since August month, but has now changed its course and is sliding downward in a relief.

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Today, petrol reaches Rs 77.43 per litre in New Delhi low by 0.13 paisa from the previous close which was Rs 77.56 per ltr.

Whereas the petrol prices in New Delhi over a period of time has been unstable due to the fluctuating fuel prices in the international market. The highest price of Petrol in New Delhi was on October 1st at Rs 84 where it touched its peak. Whereas at the end of the month on 31st Oct the prices in the capital were Rs 79.55 per ltr.

This means petrol in this state has tumbled by Rs 6.57 per litre if we take the October 01 numbers and compare with today's price.

If we take the Diesel price of October 02 (highest price) of Rs 75.69 and compare with today's price which is Rs 72.19 per litre. Diesel has tumbled by Rs 3.5 per litre in New Delhi.

Further, in Mumbai, the price of petrol per ltr is Rs 82.94 decline by 0.13 paisa from previous day price of Rs 83.07. Whereas today's diesel price in Mumbai is Rs 75.64 low by 0.12 paisa from the previous day close.

The highest price of petrol in Mumbai was on October 02, at Rs 91.34 where it touched its peak in that month. Whereas by end of October month, the petrol price saw a reversal trend despite the rise in crude prices in the global market.

If we take the October 02 numbers and compare with today's price which is Rs 82.94, petrol has tumbled by Rs 8.4 per litre in Mumbai.

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Diesel price for today is Rs 75.64 low by 0.13 paisa. The highest amount at which diesel was trading in the month of October was on 3rd at Rs 80.10 per litre and if we take the October 03 (highest price) numbers and compare with today's price, it has tumbled by Rs 4.46 per litre in Mumbai.

Similarly, in Chennai, the price for per litre petrol declined by 0.13 paisa from the previous close which was Rs 80.56; now the current price in the state is Rs 80.43, The highest price of Petrol in Chennai was on 4th October at Rs 87.33 where it touched its peak in that month. Whereas at the end of the month on 31st October the petrol prices in the city were at Rs 82.65 and from that day it shows a decline in the price of petrol.

If we take the highest price of petrol on October 04 and compare with today's price, petrol has tumbled by Rs 6.91 per litre in the city till today.

Today's diesel price in Chennai is Rs 76.30 low by 0.13 paisa from the previous close. If we take the October 01 (highest price) of Rs 80.04 and compare with today's price. Diesel has tumbled by Rs 3.74 per litre in the city.

Whereas in Kolkata petrol price declined by 0.25 paisa from previous close reaching at Rs 79.36 per ltr today. The highest price of Petrol in Kolkata was on 4th Oct at Rs 58.80 where it touched its peak in that month. Whereas at the end of the month on 31st Oct the petrol prices in the city at Rs 81.43.

If we take the October 04 numbers and compare with today's price, petrol has tumbled by Rs 6.44 per litre in Kolkata.

Today's diesel price for Kolkata is Rs 74.05 low by 0.23 paisa from the previous close. If we take the October 01 (highest price of diesel) of Rs 77.65 and compare with today's price. Diesel has tumbled by Rs 3.6 per litre in Kolkata.

From October 18 the price started declining in metro cities like Mumbai, New Delhi, Chennai and Kolkata.

It is assumed that the price of petrol will further decline, and crude oil price outlook makes a case for it.

As per SBI report Analyst Dr. Soumya Kanti Ghosh stated that there has been a significant shift in one of the key risks to inflation. Brent crude prices have now declined to less than $70 per barrel (bbl). Crude prices which rose from $63/bbl in Feb’18 to $86/bbp in Oct’18 has started to decline recently. In the past one month, crude prices declined by around $16/bbl as some nations get waivers to import oil from Iran, as well as signs that other OPEC members will pump more to offset any supply gap.

It is also assumed that the decline in oil price might continue. Even analysis of global growth vis-à-vis oil prices suggests that since 2012, oil prices in the first half are always greater than or equal to the second half of a year. With the IMF revising its global growth projections downwards, there is every reason to be optimistic.

Further, the report says, the worry is that the US recovery in terms of the number of months is also pretty close to the historical peak of 120 months. So by all historical evidence, we might be looking at global growth slowdown in the future and oil could be the barometer.

Whereas the ICICI Bank report says that the decline is close to 20% in the month of October itself that has changed the narrative for crude from an increasingly bullish sentiment to a bearish now. The sell-off was witnessed after the US eased its stance on Iran sanctions by granting waivers to eight jurisdictions that brings the total flow of Iran exports much higher than what was anticipated earlier.

The report further says that the concerns of over-supply from OPEC and their allies coincided with signals of weak demand as the EIA reported a weekly build of crude inventories for the seventh consecutive week last Wednesday.

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