Petrol and diesel prices are likely to fall in the coming days as international crude prices continue to fall. However, the fall in petrol and diesel prices may not bring much cheer to the public, as the government has already made the fuel that much more expensive for consumers. Petrol and diesel prices shot up by Rs 2.5 per litre immediately after the government raised cess and excise duty by Re 1 per litre each in the budget. VAT by the states has also been marginally increased. Petrol in Delhi was selling for Rs 73.41 per litre and diesel price was at Rs 66.29 per litre on Thursday.
"India's oil basket primarily depends on two factors, which are the crude price in the international market and the dollar conversion rate. It takes 18-20 days for the retail market to reflect the decrease in crude prices," said Ajay Bansal, President, All India Petroleum Dealers Association (AIPDA) to Financial Express Online. However, he also added that even if the prices of petrol and diesel come down in the coming days, the decrease will not be enough to offset the price hike caused by the excise and duty increase in the budget.
Crude prices continued to fall on Wednesday even after the recent Energy Information Administration (EIA) data showed a decline in US crude inventories. Crude price is trading at USD 56.6 per barrel on Thursday, with a decline of almost six per cent since the Chinese economy showed a slump of nearly three decades low. In the fear of losing demand from the world's largest crude importer, oil prices took a dip in the international market, bringing some hope for cheer in the Indian market too.
Meanwhile, the rupee opened at 68.73 against the dollar on Thursday, 9 paise stronger than the previous day. On a positive note, the rupee has not crossed the 70-mark in the last two months, which coupled with the decline in crude prices can bring fruitful results in the coming days for the common man standing in the queue of Indian gas stations.