Even as global oil prices are down to $40 per barrel mark, analysts say the fall may not benefit the average Indian consumer, at least not immediately.
In fact, if Indian price data is anything to go by, diesel prices may go up slightly on Sunday while petrol prices might remain unchanged for the fortnight. Oil marketing companies review retail prices every fortnight.
Data suggests that during the current fortnight, average free-on-board price of diesel would come to $59.07 per barrel (bbl) while that for petrol would be $58.3/bbl. The average Indian rupee-US dollar exchange rate for the period comes to Rs 65.58. The Indian basket crude price as of November 12 was $42.41 per bbl.
At these prices, the under-recovery on diesel for the fortnight comes to Rs 0.70 per litre while that for petrol comes to Rs 0.19 per litre. Dhaval Joshi, an analyst with Mumbai-based Emkay Global Financial Services said he believes companies would not cut prices as they would want to hold on to their margins, which had taken a slight hit as they had not raised prices earlier in the wake of Bihar polls.
This, after oil prices on Friday dropped further to around $40/bbl levels after the International Energy Agency (IEA) said that global oil demand growth will slow in 2016 to 1.2 million barrels per day from the highs of around 1.8 million barrels per day during the current year. The IEA also said that inventories held by countries in the Organisation for Economic Cooperation and Development (OECD) were at record high levels in September.
Joshi says that the companies would look to continue to earn a normalised marketing margin of Rs 1.20 per litre on diesel.