Petrol, diesel prices up for the fifth straight day as crude hits USD 70 mark
Officials however see no threat of disruption of supplies due to West Asia tensions
New Delhi: Petrol prices on Monday were hiked by 15 paise a litre and diesel by 17 paise as global oil prices hit the USD 70 mark over fears of conflict in the Middle East.
Retail pump prices of petrol in Delhi rose to Rs 75.69 per litre--the highest since November 2018--while those of diesel climbed to Rs 68.68, according to a price notification by state-owned fuel retailers.
This is the fifth straight day of increase in retail pump prices.
Brent futures rose as much as 3.1 per cent, or USD 2.14, to USD 70.74 per barrel while West Texas Intermediate advanced 1.7 per cent to USD 64.10 on the New York Mercantile Exchange.
Crude was last this high in September 2019, when Saudi production facilities were attacked, knocking out about 5 per cent of global output.
India is 84 per cent dependant on oil imports. Any spike in global prices has a direct bearing on its economy. Even domestic crude oil is priced according to international benchmarks.
The Middle East accounts for more than two-thirds of the country's oil imports, with Iraq and Saudi Arabia being the top suppliers.
Even though the import basket has been sought to be diversified with oil being contracted from nations such as the US, pricing in all the regions is governed by international benchmarks and rates went up everywhere following Friday's strikes.
Officials said there is no immediate threat of any supply disruption to India and the only impact would be felt in prices. Goldman Sachs said an actual disruption to global supplies is needed to keep prices at current levels.
"Nowhere in the world have we seen any supply being stopped because of US strikes. Oil continues to flow as normal," an official said.
For an economy that is struggling to recover from a six-year-low growth rate of 4.5 per cent, a spike in oil prices poses a significant risk as it will not just stoke inflation but also lead to a higher outgo on government subsidies on cooking fuel.
Monday's price increase is the fourth straight day of retail prices going up. Since January 2, petrol price has increased by 53 paise per litre while diesel rates have gone up 72 paise.
Prices were unchanged over the new year. Rates of petrol have been on the upswing since December 26 and that of diesel since November 29, 2019. Diesel prices have increased by Rs 2.95 per litre over this period while petrol has become costlier by 1.06 paise.