Indian Oil Corporation (IOC), the country’s largest petroleum retailer, said the $5 a barrel increase in crude oil prices over the past few days would reflect in the retail price of petrol and diesel with a lag.
The company and Union minister of petroleum Dharmendra Pradhan denied any direction from the government on holding the retail price line.
Sanjiv Singh, chairman of IOC, said: “We take the average of the preceding 15 days; so, a daily spike does not reflect immediately.” Petrol and diesel prices are likely to see an impact only next week if the increase continues to be high.
Singh said when prices change so substantially, inventory gains and losses play a big role. “Profitability for oil companies comes from cracks (the price differential between crude and its products). The crude oil price is not the only determinant,” he told reporters on the sidelines of the International Energy Forum meet.
From $62 a barrel on Monday to $67.45 on Wednesday, the price of WTI crude rose 8.5 per cent in three trading sessions. Read More