Dharmendra Pradhan (Oil Minister) speaks on Fuel Price Hike & Ask OPEC to Ease Production Cuts
Oil ministers Dharmendra Pradhan spoke on the fuel price rise. He said India has a price-sensitive market and that OPEC should ease production cuts. The oil minister on the fact that the OPEC countries have decided to not increase production.
This was one of the reasons why the oil minister was trying to suggest a couple of days ago that this is a temporary phenomenon. While speaking to the media, he has explained to the media the reasons behind this rise in fuel prices.
And he had said that this is a temporary phenomenon, because, you know, the NDA government was trying to urge the oil-producing companies this cartel which is called OPEC to, you know, not have the same output cuts that were going on since last few months in April.
Also, but in the meeting that happened yesterday, they decided to extend the output cut, which simply means that they are not going to be increasing production at least in April, which means when there is less demand and the supply is also quite less. because, in their view, even the demand has not increased.
India says demand is picking up so you need to increase production. So the demand-supply mismatch is going to continue for some more time. And that’s the reason why, you know, it is going to be big trouble for people who are in India. All eyes going to be on the central government now whether they decide to reduce the excise duty on petrol or diesel or not. Now why this comparison between the rise and crude prices is important with our petrol prices.
Remember, for the benefit of the people, our petrol and diesel prices are not directly linked by the crude oil prices our petrol and diesel prices are linked to the international petrol and diesel prices. Singapore determines our petrol price golf determines our diesel price.
However, if you see the trend here in the above chart that we have given for our readers, it is from April 2020 to February 2021 of this year. Now in April 2020, the crude oil price was around $19.90 per barrel.
So, basically around $20 per barrel. At that time, our petrol price was about Rs. 69.59 rupees per liter in Delhi, then the crude started rising after the lockdown restrictions were lifted in some parts of the country. Then $41.35 was the crude price our petrol price rose to Rs. 81.55 rupees per liter. In February when crude has gone up further above $20 per barrel, our petrol price has gone up significantly as well.
And looking at this kind of a trend the oil experts are indicating that in the days to come up the dealer price of the petrol and crude in India, petrol and diesel could go up. And now, if you want to leave then probably India will have to look at domestic solutions which could be either reducing the excise duty on petrol or diesel or we can expect states to do something.
