How Crude Has Inflated Your Fuel Bill: In Charts
Prices of auto and cooking fuels, already at record highs, are likely to face upward pressure as crude hit its highest in three years amid a global energy crisis.
The benchmark Brent futures surged to $85 a barrel on Monday before retreating to $81. That came as consumption rose and OPEC+ cartel stuck to a slow-and-steady increase in output.
Here’s the oil surge and domestic prices explained in charts:
Crude Continues To Simmer
Brent crude has surged 62% so far this year.
Up And Up: Petrol, Diesel Prices
In India, petrol and diesel prices have been raised 63 and 66 times, respectively, this year, according to data compiled from Bloomberg. They were reduced just 8 and 13 times, respectively, underscoring the upward pressure on prices.
Petrol and diesel prices stand at Rs 104.4 and Rs 93.17 a litre, respectively, in Delhi, according to Bloomberg data.
Petrol has turned 24.7% (Rs 20.73 a litre) costlier so far this year, and has risen 2.7% (Rs 2.8 a litre) in the first 11 days of October.
Diesel has surged 26.1% (Rs 19.3/litre) year to date and 3.5% (Rs 3.2 a litre) so far this month.
To be sure, crude price is not the only contributor to the surge in India. Ad valorem taxes also keep retail fuel prices elevated. Central and state taxes are more than the base price of fuel—at 136.5% on petrol and 106.3% on diesel.
Kitchen Fuel Pinches
The price of non-subsidised LPG refill was increased by Rs 15 (1.7%) recently. It now costs Rs 899.5 for a 14.2-kilogram cylinder in Delhi. The spike followed a Rs 25 hike in September.
For a consumer, an LPG refill has turned Rs 205 (or 29.5%) costlier since January. The price has been increased eight times and reduced once this year.
LPG is linked to the import parity price of Saudi Aramco gas—quoted in dollars and converted to rupees. Marketing and freight costs, oil companies' margins, taxes, and other charges are added.
Since December, Saudi Aramco’s LPG price has surged 77% to $800 a metric tonne.
No Respite Likely
Forecasts suggest oil prices will remain elevated.
An ICICI Direct report expects crude to average $72.9 a barrel in FY22E and $70 a barrel in FY23. Gas prices are also expected to remain firm due to the upcoming winter in the northern hemisphere. The current JKM (Japan Korea Marker) price is over $32 a metric million British thermal unit. A BloombergNEF report estimates the price to average $27.5 a unit in October-December.