Wednesday, November 29th, 2023

Earned a lot of profit by buying cheap crude oil, now why government oil companies are not reducing the prices? when will the prices come down

New Delhi: The prices of petrol and diesel in the country still remain stable. The companies have not made any change in the prices even today. In May last year, the Center had reduced the excise duty on petrol and diesel. Since then there has been no change in the price of petrol and diesel in the country. Today is the 421st consecutive day when there has been no change in the prices of petrol and diesel in the country. In the last months, the oil companies had made a lot of profit amidst the fall in the price of crude oil. Even after this, the prices of petrol and diesel did not come down in the country. State-run fuel retailers are delaying the cut in prices. Because of this, oil prices have increased up to $ 80 per barrel. The price of crude oil has increased due to reduction in production of OPEC+ countries and weakening of the dollar. Last week, oil prices registered their third consecutive weekly gain.

Petrol-Diesel Price: Crude oil prices have come down today, see the price of petrol-diesel being sold in your city

Crude oil prices increased

For the first time since April, global benchmark Brent was hovering above $81/barrel on Friday. The market has received support from the International Energy Agency and OPEC, who predicted a recovery in demand in the second half. This was boosted by expectations that the US would hold off on interest rate hikes due to supply disruptions from Egypt and Nigeria, along with subdued inflation data.

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Here, the rise in crude oil prices has prompted the government to re-impose windfall profit tax on domestic crude oil. It was reduced to zero in May as oil fell to the $70 per barrel level. Export taxes on refined products are also likely to come back or increase, as higher oil prices push up refining margins.

Difficulties increased due to market volatility

Market volatility has created a tough situation for state operated fuel retailers. Fall in oil prices has made petrol and diesel quite profitable from May 2022 at the current rates fixed. If they cut oil prices now and by the end of the year crude oil will go up further. Due to this, it will not be possible to increase the price of oil again due to assembly elections in the states.

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Due to this the prices are not decreasing

Industry officials argue that government retailers are not reducing petrol and diesel prices to make up for past losses. Alternatively, according to experts, a substantial cut in petrol and diesel prices ahead of the elections may do the government good. However, this will largely depend on some stability in the oil market.

Petrol and diesel prices have remained stable since May 22 last year, when the Center cut excise duty. This took the total cut for petrol and diesel to Rs 13 and Rs 16 per litre.

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