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The Petroleum Secretary suggests that petrol and diesel prices in India could be reduced if low global crude oil prices continue. OPEC’s recent forecast cut adds to the market’s cautious outlook.
On September 12, Petroleum Secretary Pankaj Jain indicated that India might see a reduction in petrol and diesel prices if the current trend of low international crude oil prices persists. During an interaction with media, Jain highlighted that oil marketing companies in India would evaluate the situation and consider appropriate actions based on the extended trend of crude oil prices.
Shares of major Indian oil marketing companies—Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL)—experienced modest gains during mid-day trading on September 12. This market response reflects the optimism surrounding potential adjustments in fuel pricing due to current crude oil trends.
Crude oil prices have softened over the past week. As of early September 12 trading, Brent crude futures for November were around $71.61 per barrel, while U.S. crude futures for October stood at $68.23 per barrel. This recent dip in crude oil prices has prompted discussions about the possibility of reducing domestic fuel prices.
Earlier this week, the Organisation of the Petroleum Exporting Countries (OPEC) revised down its forecast for global oil demand growth for 2024. This is the second consecutive reduction in OPEC’s expectations, reflecting concerns about slower-than-expected demand recovery. The downward revision by OPEC adds to the cautious outlook for the oil market and could influence pricing decisions by Indian oil marketing companies.
The Petroleum Secretary also confirmed ongoing discussions between the Oil Ministry and the Finance Ministry regarding the windfall tax on oil companies. The Department of Revenue is expected to make a final decision on this matter. The outcome of these discussions could further impact the pricing and financial strategies of oil marketing companies in India.
As global crude oil prices remain subdued, there is a potential for reductions in petrol and diesel prices in India. The market will closely watch the duration of this trend and any policy decisions resulting from ongoing discussions between government departments.
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