After remaining above USD 100 a barrel for two consecutive weeks, crude oil prices in global markets softened to USD 99.84 a barrel on Tuesday. This has eased the margin pressure on retail oil companies. The companies have not increased the prices of petrol and diesel despite the increase in the cost of raw materials. Brent crude fell 7 per cent on Tuesday.
Earlier, on February 28, it had gone up to USD 100 a barrel and on March 7 reached a 14-year high of USD 139 a barrel. The market has been affected by the increasing cases of coronavirus in China. China is the world's largest importer of crude oil, so demand may be adversely affected. Apart from this, there are also signs of progress in talks on a ceasefire between Ukraine and Russia.
The reduction in crude oil prices is good news for India as it will reduce the import bill of the world's third largest oil importer. According to industry sources, this will also ease the pressure on the public sector retail oil companies. State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) did not change the prices of petrol and diesel for a record 131 days.
Prices have remained the same despite a jump of more than 60 per cent in the cost of raw materials. There were apprehensions that companies may increase fuel prices after the assembly elections in five states, including UP, are completed last week. But he kept the price intact and did not give the opposition parties a chance to corner the government in the second phase of Parliament's budget session starting Monday.
A senior official said that the reduction in crude oil prices is definitely a good sign for the petroleum companies, they were incurring a loss of Rs 12-13 per liter on the sale of petrol and diesel considering the marketing margin. Since November 4, when the price of crude oil in the international market was USD 81 per barrel, the companies have not increased the prices.