Petroleum prices set to zoom

Petroleum prices set to zoom

India should brace for a steep hike in petrol prices after the Assembly elections are over next month as harsh winter in Europe and geo-political tensions in oil producing countries have sent crude prices soaring.

The pressure on the country’s mounting import bill and government’s tight fiscal situation also point to some upward revision in diesel and cooking fuel prices in the coming months, say analysts.

The price of Brent crude hit $118.17 a barrel on Thursday, the highest level in the past six months. According to Barclays, improved crude demand in developing Asian countries, led by India and China, is expected to keep the crude price up.

The prices of Brent, Dubai crude and Singapore spot petrol price are the three major determinants on which India’s petrol price is benchmarked. Pressure on any one of these may fan petrol prices in India.

A public sector oil marketing company official told Deccan Herald the market will surely be affected as other types of crude and gasoline prices would also follow the suit.

He, however, stopped short of hazarding any guess on whether there will be any marked rise in the prices of petrol in the next revision, expected soon after the Assembly polls in the five states are over.

India imports close to 80 per cent of its crude oil consumption but supply has not kept pace due to a variety of factors leading to soaring prices and pressure on imports.

Iran is exporting less due to the US sanctions and an impending sanction by Europe.

Loadings in the North Sea is facing disruption due to harsh winter, while Libyan crude oil output has been stalled since December as the country is dealing with its own fires.