OPEC output cut: Petrol, diesel price freeze in India just gets longer

After international oil prices surged on the news of significant production cuts by OPEC+, it seems likely that the record-breaking six-month price freeze on gasoline and diesel will be extended. On Wednesday, a number of the largest oil-producing nations on the globe decided to reduce their output by two million barrels per day in an effort to boost oil prices, which had fallen to levels seen before the Ukraine War.

This is terrible news for India, which had been able to reduce its import costs and limit the losses that state-owned fuel dealers were suffering from the sale of gasoline and diesel due to the recent drop in oil prices.

However, they warned that margins on gasoline would shrink and losses on diesel would increase due to rising crude oil prices, which are converted into gasoline, diesel, and other products. India imports 85% of its oil requirements, and domestic prices are directly influenced by global oil prices.

In the national capital, a litre of gasoline presently costs Rs 96.72 and a litre of diesel Rs 89.62. This is a decrease from the Rs 105.41 per litre of gasoline and Rs 96.67 per litre of diesel prices on April 6. According to reports, the Rs 10 per litre price hike that took effect between March 22 and April 6 wasn’t enough to cover the cost, and the new freeze meant that more losses would accrue.

The average price per barrel of crude oil that India buys was the US $ 116.01 in June, the highest level since March 2013. It had an average value of US $102.97 in April before increasing to the US $109.51 in May.

In August, it was US $97.40 on average; in September, it was the US $ 90.71. The standard price per barrel this month is 90.29 USD. During the initial six months of the current fiscal year, which began in April, it had an average price of USD 103.7 per barrel. In 2013–14, the Indian basket averaged three digits for the last time.