Petroleum Secretary Pankaj Jain has said on September 12 that India's oil marketing companies may consider lowering fuel prices, if in their assessment, the trend of international crude oil prices remains low for some more time.
Windfall Tax Review?
He also confirmed to CNBC-Awaaz in an interaction that the Oil Ministry has been in talks with the Finance Ministry regarding the windfall tax, and the Department of Revenue will take a final decision in this regard. Both ministries will continue to engage in this matter, he said.
Shares of oil marketing companies IOC, HPCL and BPCL were trading with modest gains on September 12, during mid-day trade.
Oil Price Cut Coming?
Secretary Pankaj Jain acknowledged that oil prices have cooled off in the last 7-10 days, and it needs to be seen for how long global prices stay subdued, as it may not be prudent to decide based only on one week's price movement. "We need time to see if this trend (in oil prices) can continue going forward, only then can we assess any impact. India's oil purchase in done keeping in mind a longer duration of oil price trend," he added.
A decision on price cut of petrol and diesel by the state-run oil marketing companies (OMCs), however, would be taken after reviewing the Brent price for a few more weeks, according to energy analysts.
Oil Price Trend
Brent crude futures for November were near $71.61 a barrel and U.S. crude futures for October were at $68.23 a barrel, in early trade on September 12.
Brent crude - a benchmark for global prices - has slipped below $70 a barrel for the first time since 2021, and already, several analysts are forecasting a further weakness in crude prices. Citigroup and JPMorgan have put out projections which suggest oil may test $60 level in 2025.
India To Welcome Higher Oil Output
Regarding OPEC's decision on oil supply, Pankaj Jain said India wants the production of crude oil to rise, as demand from many countries such as ours remains intact.
Earlier in the week, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2024, and also trimmed its expectation for next year. This is the second consecutive downward revision by OPEC.
India is the world's third largest oil importer and consumer, meeting over 80% of its oil requirement internationally.
Pankaj Jain added that India will consider buying more oil from Russia, if it offer cheaper rates. In July, India was the top buyer of Russian oil, surpassing China.
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