Oil on boil again: Will petrol, diesel prices rise in Hyderabad, other cities?

Hyderabad Desk

Hyderabad: Petrol and diesel prices in Hyderabad and other cities in India may rise as investment bank Goldman Sachs warned that crude oil prices are likely to enter triple-digit territory if Russia and Saudi Arabia do not unwind their aggressive supply cuts.

Brent crude is the world’s oil price benchmark and is produced in the North Sea. Currently, Brent crude is at USD 90.44, which may reach USD 107 as predicted by Goldman Sachs.

The surge in oil is being witnessed because Saudi Arabia has announced that it would extend its production cuts until the end of the year, while Russia said it would extend its export cuts of 300,000 barrels per day for the same period.

Apart from the stance taken by Saudi Arabia and Russia, Chinese manufacturing data is also bouncing back to growth, which will add to bearish sentiment in oil markets.

All these factors can lead to a further rise in crude oil prices, thereby increasing the possibility of rising petrol and diesel prices in Hyderabad and other cities in India.

JM Financial Institutional Securities’ prediction

However, JM Financial Institutional Securities, in a report, said that the central government may cut petrol and diesel prices by Rs 3-5 a liter around Diwali, given that key state elections start from November-December.

Though any cut in oil prices will provide relief to the common man from the recent surge in inflation, it could result in risks to the earnings of OMCs.

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As Brent crude prices are already above USD 90, it remains to be seen whether the government will give importance to state elections and go ahead with a price cut or increase prices if crude oil prices jump further and reach USD 107, as predicted by Goldman Sachs.

How prices are calculated in India?

Oil companies review and revise the prices of petrol and diesel on a daily basis. The new prices become effective from 6 a.m. every morning.

The daily review and revision of prices are based on the average price of benchmark fuel in the international market in the preceding 15 days, and foreign exchange rates. Oil Marketing Companies are free to revise product prices based on economics.

Petrol and diesel prices in Hyderabad

The prices of petrol and diesel vary from state to state due to different rates of Value Added Tax (VAT) by the state governments. In Hyderabad, as of September 7, 2023, the prices of petrol and diesel were 109.66 and 97.82 per liter, respectively.

Cities Petrol price per liter Diesel price per liter
Hyderabad Rs. 109.66 Rs. 97.82
Delhi Rs. 96.72 Rs. 89.62
Mumbai Rs. 111.35 Rs. 97.28
Kolkata Rs. 106.03 Rs. 92.76
Chennai Rs. 102.63 Rs. 94.24

Since the excise duty cut done last year, the prices of petrol and diesel in Hyderabad and other metro cities were not changed.

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