Aviations as well as oil marketing stocks were under stress in the current month (November 2017) on account of increase in crude oil prices.
Crude oil prices in the international market have come substantially down, but surprisingly the prices of petroleum products in India are on the rise, pinching the common man’s pocket.
The fall in crude oil prices in the past three years — induced partly by a demand shock and a supply glut — has given a fiscal bonanza to the Union government, the benefits of which have not been entirely transferred to retail consumers in the country.
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Modi government seems to be taking a lot of comfort from the low crude oil prices while banking on the domestic distribution reforms as it has projected a sequentially lower petroleum subsidy in the next two financial years.
WTI crude oil prices tumbled for the fourth straight week to hit a six-week low of $44.22 per barrel on the persistence of bearish fundamentals, which seem to be derailing Opec’s efforts to balance the oil market, at least in the short term.
The Russian rouble and Moscow-listed shares have slumped as oil prices fell sharply, hurting commodity-exposed economies worldwide.
Under a recently announced pilot project, the price of petrol and diesel is being revised on a daily basis in five cities.
Oil marketing companies are planning to put in place a mechanism under which fuel prices (petrol and diesel) will be aligned to international crude oil prices on a daily basis.
Oil prices were nearly unchanged last week as the Opec and IEA monthly reports gave mixed set of signals. While the compliance to output cuts has been nearly 100 per cent from the Opec side, relative non-compliance of Non-Opec coupled with steadily climbing US production is keeping prices under pressure.
Crude oil prices should remain around $50 per barrel during 2017, according to the U.S. Energy Information Administration’s Short-Term Energy Outlook released on Jan. 11.