The Indian crude basket is currently down nearly 10% to $56 per barrel from $61.6 levels seen a month ago. And if these levels hold on, and the rupee-US dollar exchange rate remains stable, it could mean a drop in the retail prices of petrol and diesel in the coming weeks.
Globally, oil fell towards $56 a barrel on Wednesday, trading close to a three-month low, as a significant correction in the Chinese stock market coupled with the Greek debt crisis and the continuing stalemate over the Iran nuclear talks raised the possibility of weaker economic growth that could hit oil demand.
“Oil prices will remain under pressure or at least find it difficult to recover from current levels for 2-4 weeks,” Carsten Fritsch, senior oil analyst at Germany’s Commerzbank AG, said over telephone from Frankfurt. “China will be more important than Iran, as Iranian crude is unlikely to flood the international market before October,” he added.
The rupee has been hovering around 63-64 against the US dollar in the last one month.
However, a senior executive with Indian Oil Corp said the net impact of the crude price movement on the final retail price in India would be difficult to estimate, since that is a function of a complex matrix of the 15-day average of crude price movement and the rupee-US dollar variation.
{{/usCountry}}However, a senior executive with Indian Oil Corp said the net impact of the crude price movement on the final retail price in India would be difficult to estimate, since that is a function of a complex matrix of the 15-day average of crude price movement and the rupee-US dollar variation.
{{/usCountry}}Petrol and diesel prices were last reduced by Rs 0.31 to Rs 66.62 a litre and by Rs 0.71 to Rs 50.22 a litre, respectively, on July 1. The next revision is due on July 15.