Petrol and diesel prices were unchanged on March 18, remaining stagnant for more than 130 days, a notification issued by state-owned fuel retailers showed, even though crude prices have jumped to record highs in the last weeks.
The last rate cut was by Delhi when it reduced the local sales tax, or the value-added tax (VAT), on petrol from 30 to 19.4 percent from December 1 midnight, bringing down the price by around Rs 8 to Rs 95.41 a litre. Diesel price remains unchanged in the national capital at Rs 86.67 a litre.
Prices have stayed frozen in the past but the current pause is the longest since daily fuel price revision was adopted in June 2017. There are, however, fears that the Russia-Ukraine war will spill over into India’s retail fuel prices soon.
On November 3, the Centre had gone for the deepest excise duty cut ever to cool retail prices from record highs, reducing the duty on petrol by Rs 5 and on diesel by Rs 10. Many states and union territories followed the Centre's lead to give further relief to consumers.
In Mumbai, a November 4 cut reduced the price of petrol to Rs 109.98 a litre, which remains unchanged. Diesel is at Rs 94.14 a litre. While in Kolkata, petrol and diesel prices remain at Rs 104.67 and Rs 89.79. Petrol is at Rs 101.40 and diesel at Rs 91.43 in Chennai.
In Gurugram petrol is Rs 95.48 and diesel Rs 86.70 a litre, Noida petrol Rs 95.73 and diesel Rs 85.21, Jaipur petrol Rs 107.21 and diesel Rs 90.83, Lucknow petrol Rs 95.14 and diesel Rs 86.68 and in Patna, petrol is selling at Rs 105.90 and diesel Rs 91.73 .
States and UTs that cut VAT after the Centre reduced excise duty include Ladakh, Jammu and Kashmir, Himachal Pradesh, Delhi, Sikkim, Mizoram, Daman and Diu, Karnataka and Puducherry. Punjab saw the biggest drop in petrol prices after it slashed VAT the most. The UT of Ladakh has seen the biggest drop in diesel rates.
States that did not lower VAT include Maharashtra, Jharkhand, Tamil Nadu, West Bengal, Kerala, Telangana and Andhra Pradesh.
Oil jumps as Russia-Ukraine talks make little headway
Oil prices extended their rally at the end of a third volatile week of trade on March 17 as there was slim progress in peace talks between Russia and Ukraine, raising the spectre of tighter sanctions and a prolonged disruption to oil supply.
Russian President Vladimir Putin's March 16 warning to "traitors and scum" at home who helped the West that they would be spat out like gnats added to market jitters about an extended conflict.
Brent crude futures jumped $2.43, or 2.3 percent, to $109.07 a barrel at 0141 GMT, after surging nearly 9 percent on March 16 in the largest percentage gain since mid-2020.
The United States West Texas Intermediate (WTI) crude futures climbed $2.75, or 2.7 percent, to $105.73 a barrel, adding to an 8 percent jump on March 16.
Despite the rebound, both benchmark contracts were set to end the week down about 4 percent, after having traded in a $16 range. Prices have dropped from 14-year highs hit nearly two weeks ago.
Outlook remains bleak
Morgan Stanley raised its Brent price forecast by $20 for the third quarter to $120, predicting about 1 million bpd fall in Russian production from April.
The fall will more than offset a downward global demand revision of about 600,000 bpd, the bank said. "Both supply and demand are hurting but supply is currently hurting more and a tight oil market for the coming two quarters is to be expected," bank SEB said.
Analysts said Putin's speech, comments from a Kremlin spokesperson saying a report of major progress in peace talks was "wrong" and US President Joe Biden calling his Russian counterpart a "war criminal" all stoked a wave of buying on March 16.
The volatility has scared players out of the oil market, which in turn is likely to exacerbate price swings, traders, bankers and analysts added.
"I'm still expecting more volatility. There's a lot of uncertainty out there still. In such a tight market and such an illiquid paper market – you’re going to get some volatility," said Justin Smirk, senior economist at Westpac in Sydney.
Closing price for crude oil
Benchmark US crude oil for April delivery rose $7.94 to $102.98 a barrel on March 16. Brent crude for May delivery rose $8.62 to $106.64.
Wholesale gasoline for April delivery rose 23 cents to $3.22 a gallon. April heating oil rose 39 cents to $3.49 a gallon. April natural gas rose 24 cents $4.99 per 1,000 cubic feet.
(With price inputs from Reuters and The Associated Press)
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