New Delhi: In what could be a sigh of relief for fuel consumers in India as the OPEC+ group on Thursday decided to continue production at 400,000 barrels per day in January despite growing panic over Omicron – the new Covid-19 version – Disrupting the improvement in demand and building up of inventory.
But the group left the option open to adjust production when current market conditions changed – a signal for abnormal growth in inventory due to Omicron’s downward pressure on demand and/or the coordinated release of US-led emergency stockpiles. Top five consumers of the world including India.
OPEC’s announcement after a meeting of energy ministers of member countries raises hopes of further reduction in crude oil prices or at least stability in the global market.
A further fall in crude oil prices or a prolonged calm in the market will give confidence to fuel retailers to cut prices at the pumps, which have been frozen for 29 days in view of the volatility in prices.
Benchmark crude oil It has fallen from its three-year high of $86/barrel reached in October. Just last Friday, the price dropped by $10 on Omicron’s growing fears.
After the OPEC+ announcement, it broke more than $ 1 on Thursday, but again came down to around $ 70 a barrel. At this level of crude oil, petrol and diesel should become cheaper by about Rs 6 per liter, if retailers were to pass on the benefit to consumers.
The reduction in fuel prices at this time will also benefit the BJP in the UP elections, which are round the corner. The Center had on November 3 slashed excise duty on petrol and diesel by Rs 5 and Rs 10 per liter respectively, to bring down fuel prices from their record lows.
The opposition said the move was motivated by fears of an adverse effect of record fuel prices on the BJP’s prospects in the UP elections, pointing out that the government had rejected calls for duty cuts since February, when petrol Price was above Rs 100 and diesel was nearing the century mark.
But the group left the option open to adjust production when current market conditions changed – a signal for abnormal growth in inventory due to Omicron’s downward pressure on demand and/or the coordinated release of US-led emergency stockpiles. Top five consumers of the world including India.
OPEC’s announcement after a meeting of energy ministers of member countries raises hopes of further reduction in crude oil prices or at least stability in the global market.
A further fall in crude oil prices or a prolonged calm in the market will give confidence to fuel retailers to cut prices at the pumps, which have been frozen for 29 days in view of the volatility in prices.
Benchmark crude oil It has fallen from its three-year high of $86/barrel reached in October. Just last Friday, the price dropped by $10 on Omicron’s growing fears.
After the OPEC+ announcement, it broke more than $ 1 on Thursday, but again came down to around $ 70 a barrel. At this level of crude oil, petrol and diesel should become cheaper by about Rs 6 per liter, if retailers were to pass on the benefit to consumers.
The reduction in fuel prices at this time will also benefit the BJP in the UP elections, which are round the corner. The Center had on November 3 slashed excise duty on petrol and diesel by Rs 5 and Rs 10 per liter respectively, to bring down fuel prices from their record lows.
The opposition said the move was motivated by fears of an adverse effect of record fuel prices on the BJP’s prospects in the UP elections, pointing out that the government had rejected calls for duty cuts since February, when petrol Price was above Rs 100 and diesel was nearing the century mark.
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