JOIN USFuel prices may come down in near future even if Centre does not cut taxes
The Centre may not cut excise duty on petrol and diesel but the transport fuel prices may still come down after a fall in global crude prices due to Organisation of Petroleum Exporting Countries (OPEC) and its allies' move to raise production and a resurgence in Covid-19 cases.
Oil prices fell on Wednesday. Brent crude fell 0.8 per cent, to nearly $69 a barrel after Tuesday's over 1 per cent gain.
Crude oil prices had fallen sharply on Monday. Crude, which was trading around $76 per barrel at the beginning of the month, came down close to $67 per barrel on Monday.
“Prices of crude have weighed down by concerns about oversupply in the market after OPEC+ agreed to boost output. Crude oil prices were also hurt by rising concerns about outlook for energy demand due to the rapidly spreading delta variant of the coronavirus and fresh restrictions on the movements in several countries across the world,” said Ajay Kumar Kedia of Kedia commodities.
The OPEC and its allies on Sunday agreed to increase global oil production by 400,000 barrels per day. They committed to restoring all of the cuts made at the beginning of Covid-19.
Experts said increased production and lower demand due to new Covid cases will automatically lower the price of crude oil leading to a cut in pump prices of petrol and diesel in the coming days provided there is no duty hike by the government and oil companies continue to adjust prices according to market forces.
Officials in the government said there is no move to raise excise duty once again. The government will not be able to cut the levy either due to overriding fiscal concerns.