Petrol, diesel prices rise for first time in 2 months; vaccine hope, lockdown fear balance crude prices

Petrol and diesel prices today rose for the first time in nearly two months. Petrol price rose 17 paise per litre and diesel price surged 22 paise, according to the Indian Oil Corporation. With today’s increase in fuel prices, petrol is being sold at Rs 81.23 a litre while diesel is at Rs 70.68 a litre in Delhi. While the last revision done to the petrol prices was on September 22, the diesel rates last changed on October 2. Earlier in the year, retail fuel prices remained unchanged between June 30 and August 15, and March 17 and June 6.

The Oil Marketing Companies (OMCs) in India such as Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation – follow benchmark international oil price and foreign exchange rate to revise rates of petrol and diesel on a daily basis. Brent crude futures rose over 0.4 per cent at around $44.4 a barrel on Friday. The rise was a third consecutive weekly gain boosted by optimism about a coronavirus vaccine and hopes that OPEC+ will delay a planned rise in oil output. 

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However, in contrary, the upside remained capped and the prices did not rise much amid worries that surging covid-19 cases in the US and Europe could witness renewed restrictions and could dent demand for the fuel. Concerns about oversupply remain as Libya’s National Oil Corporation (NOC) said Libya’s oil production has rapidly returned to previous rates as it reached 1.25 million barrels per day, according to Sriram Iyer, Senior Research Analyst at Reliance Securities.  

Additionally, as Libya is currently exempt from the oil cut curbs, we could further increase in output from the nation and could weigh on sentiments, Sriram Iyer added. The next big event for oil will be the OPEC+ meeting on November 30 – December 1, where the cartel could discuss whether to maintain the current levels of output cuts or trim output, he further said.