Rs 6 hike in fuel prices likely as polls end, oil tests $139 – Times of India

NEW DELHI: World benchmark crude rocketed to $139 per barrel, the very best since July 2008, giving the federal government the deal with to permit oil companies to start out elevating fuel prices regularly because the state polls ended on Monday.
Individuals within the know stated the final pondering within the authorities signifies state-run gasoline retailers could also be allowed to boost costs by Rs 5-6 per litre in small doses to melt the influence.
The retailers will soak up the remaining losses, pegged at about Rs 12 per litre, in the intervening time, offsetting them towards stock positive factors and refining margins.
A direct tax reduce isn’t on the desk, although it could occur at a later stage if crude stays at present ranges for lengthy. In that case, an equitable burden-sharing method could also be thought of the place the Centre and states give tax reduction, oil firms soak up some losses and in order that burden on consumers is minimised.
There may be an opinion that the retailers could also be requested to attend until the ballot outcomes are out on March 10 and governments are shaped earlier than beginning the each day value revisions.
Costs haven’t been raised since November 4, when the Central and state governments reduce taxes to offer reduction after oil breached the $83 per barrel mark. The ‘Indian Basket’, or the combination of crude purchased by Indian refiners, has since shot previous $117 per barrel and stood at $111.61 on Friday in tandem with Brent.
The rupee, business watchers stated, may show to be the fly within the ointment and harden the pinch. The Indian foreign money sank to its lowest at nearly 77 towards the greenback on Monday. The depreciation will improve the under-recovery to impair the profitability of shops after they offset the under-recovery on petrol and diesel.
Gasoline costs are linked to their worldwide benchmarks and the greenback change charge, whereas crude costs are a consider deciding the unfold.
Although gasoline pricing is deregulated, the federal government controls the market via casual diktats to state-run retailers who management 90% of the market.
Oil costs jumped after information of impending US and European sanctions on Russian power exports, which account for 8% of worldwide provide and 35% of Europe’s consumption.

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