Oil prices surge in global market amid escalating Iran-Israel tensions
The price of Brent crude had fallen to around $87 per barrel on Wednesday following higher US inventories and the decline in Chinese demand due to a slowing economy.
Prices of petrol and diesel jumped by 25 paise per litre each on Wednesday after the state-owned oil marketing companies hiked prices after a five-day hiatus.
After the increase, petrol in the national capital was being sold at 84.45 per litre and diesel is priced at Rs 74.63. In Mumbai, petrol comes for Rs 91.07 a litre and diesel for Rs 81.34.
This is the highest ever price of petrol in Delhi, while diesel is at a record high in Mumbai.
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The state-owned fuel retailers including, Indian Oil Corporation Ltd (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), had on January 6, resumed daily price revision after nearly a month-long hiatus.
Rates were hiked on two consecutive days – totalling 49 paise for petrol and 51 paise for diesel – before they hit a pause button again.
The rise in fuel prices was caused by the latest jump in the crude oil prices, with Brent crude trading above $57 per barrel, due to decline of stockpiles in the US.
US West Texas Intermediate (WTI) was up 1.3 per cent at $53.88 a barrel.
Both benchmarks, Brent and WTI, are trading at the highest since February, before the coronavirus outbreak in China began spreading across the world, forcing lockdowns that shaved off demand.
According to data from the American Petroleum Institute, crude oil inventory in the US declined by 5.8 million barrels in the week ending Friday, January 8.
Further, the higher supply cut recently announced by Saudi Arabia, for the months of February and March also are supporting the crude prices.
Meanwhile, the government had responded to that situation by cutting excise duty on petrol and diesel by Rs 1.50 per litre in a bid to ease inflationary pressure and boost consumer confidence. Alongside, state-owned fuel retailers cut prices by another Re 1 a litre, which they recouped later.
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