Mint Primer: Global crude is at $72. Will petrol prices see a cut?
Subscribe to enjoy similar stories. Crude prices have plummeted 20% since March and are now below $75 per barrel. This has raised hopes of a steep cut in petrol and diesel prices in India, last revised before the general elections.
Mint looks at the possibility of a price cut and how it would impact the economy: Globally, crude has fallen a sharp 19% since April. At $72.48 now, the Indian basket of crude oil is at its lowest since August 2021 when it was $69.8 per barrel. Since the pandemic, when prices slumped to a two-decade low of $19.9 in March 2020, prices have oscillated wildly.
Prices crossed $100 per barrel for the first time since 2014 in March 2022 to hit a decadal high of $116 per barrel in June 2022. But it declined thereafter to settle at less than $80 per barrel by the end of fiscal year 2023. In the last fiscal year, prices did shoot to over $90 per barrel in September but were mostly range-bound at around $81-84 per barrel.
Read more: GST to incentives: Centre working on plan to reduce ATF prices Prices have fallen largely due to reduced demand from China, the world’s largest oil importer. In its monthly report last Tuesday, Opec lowered its global oil demand forecast for the year to 2.03 million barrels per day (bpd) from its earlier estimate of 2.11 million bpd. This was the second consecutive month of downward revision—its original demand projection in July was 2.25 million bpd.
It also cut its growth estimate for 2025 from 1.78 million bpd to 1.74 million bpd. Geopolitical tensions also have a big impact on oil prices but most of the fears of increased escalation in tensions have been unfounded. Petrol and diesel prices were deregulated in India in 2010 and 2014, respectively, and till 2017, oil
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