In the international market, the price of crude oil has dropped to the lowest level of 10 months. After this, everyone’s eyes are on the price of petrol and diesel in India, when will it decrease? To know the possibility of this reduction, we have to understand some figures. First of all, let’s talk about the prices of crude oil, in which the price of the most prominent Brent crude decreased by $ 2.6 / barrel, ie more than 3 percent, to reach $ 80.97 per barrel on Monday. This is the lowest price since January 4 at the beginning of this year. Due to this fall in the prices of Brent crude oil, the cost of the Indian basket, that is, the average price at which Indian companies buy crude oil, has come down from an average of $ 112.8 per barrel in March to $ 82 per barrel.
Oil companies have scope to reduce the price
Due to this reduction in the prices of crude oil, the oil marketing companies have also got scope to reduce the prices of petrol and diesel. Actually, the cost of petrol companies has come down due to the reduction in crude oil prices. In such a situation, as the price of Brent crude in the Indian basket is cheaper by $ 30 per barrel as compared to March, they are now making profit instead of loss on the sale of petrol and diesel. Looking at the current rate, oil marketing companies have the scope to reduce the price of petrol by Rs 6 per liter and diesel by Rs 5 per litre.
Will oil companies reduce the price?
Oil marketing companies may prefer to make up for the loss caused by high crude oil prices this year before deciding to reduce prices. According to the latest figures, IOCL, HPCL and BPCL have incurred a loss of Rs 2748.66 crore on the sale of petrol and diesel in the July-September quarter. If the government had not compensated for the loss incurred on the sale of LPG in the last two years, then this loss could have been huge. The government compensated the losses incurred on the sale of LPG by paying a lump sum amount of 22 thousand crores to the oil marketing companies. Despite this, it is not easy for the oil companies to reduce the price due to non-compensation of the entire loss of these companies.
Why did the price of crude oil fall?
The reason for the decrease in the prices of crude oil is the dark clouds of recession in many countries of the world. In such a situation, due to the decrease in demand, the possibility of slowing down the economic growth has increased. Due to this, there may be a decrease in demand in China, America and European countries this winter. Due to all this the sentiments have become weak and the pressure on crude oil prices is increasing. Along with this, the ongoing increase in interest rates in many countries and the lockdown in China have also worked to reduce the prices of crude oil. Due to this, there is a possibility that the situation is not expected to improve for the coming few months and the reduction in prices may continue like this. One of the reasons for the decrease in crude oil prices is also the stringent sanctions imposed by the G-7 countries on Russian crude oil. Apart from this, the US has approved crude production in Venezuela, which will now produce Chevron Corp crude. This will also increase the supply in the international market and will put pressure on the prices of crude oil.
Till when will the prices of petrol and diesel decrease?
It is difficult to make an accurate estimate of the reduction in the prices of petrol and diesel, but it is certain that if the oil marketing companies make up their losses in the October-December quarter and there is a reduction in the prices of crude oil in the January-March quarter as well. Then it is possible that it can reach some part of its scope to the customers. But here also it has to be seen that if the prices start increasing again, then the oil companies will not take any such decision. Anyway, Morgan Stanley analysts estimate that in 2023, crude oil prices could cross the level of $ 110 per barrel. That is, they can gain 33 percent from the current level. Although this level will be less than the highest level of 2022 of $ 127 per barrel. It will be interesting to see what kind of stand the oil marketing companies will take in such a situation.