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India’s crude cost slips below $100 but fuel price cut unlikely


NEW DELHI: Indian crude oil prices fell below $100 a barrel for the first time since April after the benchmark rate fell this week. While it looks to be a silver lining for the rupee, an immediate drop in fuel prices is unlikely as the Indian currency falls to a record and the pump rate freeze still sinks retailers. in red.
The data shows that the Indian Basket, or a blend of crude oil purchased by Indian refiners, fell to $99.76 a barrel on July 14. The basket last fell below $100 on April 25 while in level 99.17 USD/barrel.
The drop came as global prices fell 5.5% for the week as recession fears overshadowed concerns about a supply-demand mismatch. But the market remains volatile, with benchmark Brent oil prices climbing back above $100 on Friday on hopes of an early production increase. Saudi Arabia and the UAE recession.
The Indian Basket last fell below $100 on April 25 at $99.17 per barrel but has crossed the century mark since then. It first crossed the $100 mark this year on February 24 to hit $100.71 a barrel when the Ukraine-Russia conflict broke out.
If the price sustains below $100 for a while, it will ease pressure on the undervalued rupee, which is hovering near historic lows of 80 against the dollar. Falling prices will reduce the dollar’s demand for oil imports. A 45% increase in dollar demand from refineries was cited as the main reason why foreign exchange reserves fell by $8 billion in the week ending July 8.
However, the drop in crude oil prices was not enough to wipe out losses for petrol and diesel, which were pegged by brokers at Rs 12-15 per liter as pump prices remained frozen amid rising prices. Crude oil rose and rupee fell – both key factors in pricing. The record drop in the rupee has largely offset the drop in crude oil prices.
The government announced cuts of Rs 8 for petrol and Rs 6 for diesel on May 21 when the Indian dong was at $109.55 per barrel and rupees were at 73-74 against the USD. The price of fuel after the corresponding cut to oil was at $85, while the rupee fell to 80 vs Green silver coin.
The price of Indian crude oil rose to a decade high at $121.28/barrel on June 9. This is the highest since March 9, 2012 when Indian Basket touched $125. ,13. This pushed the monthly average for June to $118.34 per barrel, a level last seen in April 2012 when the average price was $118.64.
In the period 2021-22, oil companies spent $144 billion to import about 212 million tons (tons) of crude oil and 40 tons of products. High oil prices weaken the rupee as it drains the foreign exchange kitty as more Indian currency is needed to buy every dollar. As the rupee loses strength, importing raw materials becomes more expensive.
This affects India Incprofits by increasing the cost of production, which leads to higher inflation as goods and services become more expensive and makes finance more difficult for the average person.
Oil prices have been up since October 2021 but it spiked after the Russia-Ukraine conflict broke out on February 24, hitting a 14-year high of $139 a barrel on March 7.





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