New Delhi: Despite a seven-month drop in global oil prices, India's state-owned fuel merchants have been able to recover their losses after maintaining rates for a record-breaking five months despite rising costs.
As demand wanes due to recession worries, the price of international benchmark Brent crude last week dropped below USD 90 a barrel for the first time since early February. After recovering, it is now selling at USD 92.84 per barrel, the lowest price in the previous six months.
Prices fell despite bullish developments, including Russia keeping the North Stream pipeline offline and producers cartel OPEC and its allies (OPEC+) cutting production. But this has not led to any revision in retail petrol and diesel prices in India and they continue to be on freeze for a record-setting 158 days.
Responding to reporters' questions on no change in fuel prices, oil minister Hardeep Singh Puri had on Friday sought to link the no revision to losses state-owned fuel retailers incurred in keeping rates unchanged when international oil prices surged to multi-year high.
"When (international oil) prices were high, our (petrol and diesel) prices were already low," he had said. "Have we recouped all our losses?" he went on to ask.
He however did not elaborate on the losses incurred on keeping rates steady since April 6. The basket of crude oil that India imports averaged USD 88 per barrel on September 8. It had averaged USD 102.97 in April, before rising to USD 109.51 in the following month and USD 116.01 in June. Prices started to fall in July when the Indian basket averaged USD 105.49 a barrel. It averaged USD 97.40 in August and USD 92.87 in September so far.
State-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not exercised their right to adjust the retail selling price of petrol and diesel in line with the international costs for over five months now to help the government manage runaway inflation.