New Delhi: Diesel price was hiked Monday by 25 paise per litre. It is the third hike in diesel prices since last week. More rate hikes for both diesel and petrol are in the offing in the coming days as international oil prices have soared to a three-year high.
The price of diesel was hiked to Rs 89.32 per litre in Delhi and to Rs 96.94 in Mumbai, according to a price notification of state-owned fuel retailers. This is the second straight day of increase in diesel prices and the third since September 24. However, petrol prices have remained steady for more than two months.
However, industry sources said the price of petrol, alongside diesel, is likely to be increased in the coming days. This is because of the rally in international crude oil prices have continued, with Brent Future prices quoting at more than USD 78 per barrel since September 24.
Crude oil prices have reached a nearly three-year high as global output disruptions have forced energy companies to draw more crude oil out of their stockpiles. Accordingly, US crude oil inventory levels are also nearing a three-year low.
“Global demand for crude oil has been increasing consistently with the easing of pandemic restrictions and improving vaccination rates. On the supply side, OPEC+ alliance has been slow in easing output restrictions, contributing to the tightened supply in the market,” a source said here Monday.
Additionally, hurricanes Ida and Nicholas have impacted crude oil production in the US Gulf of Mexico region.
As per both IEA and OPEC, global demand is expected to outpace supply due to which international oil prices will likely remain firm in the near to mid-term. A simultaneous rally in natural gas is also likely to drive demand for alternate fuels.
State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had n September 24 resumed daily price revisions, ending the pause in rates since September 5. In all, diesel prices have gone up by 70 paise a litre, negating more than half of the Rs 1.25 a litre cut in prices that happened between July 18 and September 5. The last increase in petrol rate was July 17.
“However, with no respite from surging international prices, a rise in retail prices of both petrol and diesel is likely in the coming days,” the source said.
India is dependent on imports to meet nearly 85 per cent of its oil needs and so benchmarks local fuel rates to international oil prices.