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Tue, 15 Oct 2019

Northeast Today

Petrol, diesel prices likely to go up by Rs 5 per litre after the Saudi oil attack, says report

Petrol, diesel prices likely to go up by Rs 5 per litre after the Saudi oil attack, says report
September 17
10:48 2019

NET Bureau

Following the drone attack on Aramco plant in Saudi Arabia, the price of petroleum products such as petrol and diesel is expected to go up by Rs 5 per litre in the coming days. This has come in the wake of international oil prices that spiked after the attack on Saudi’s Aramco facility at Abqaiq. On Monday, Brent crude prices shot up by $6 at $67 a barrel and are likely to increase even further.

The sudden increase in price may stress refining margins due to slowing demand which will increase the possibility of losses for the oil marketing companies (OMCs). Since the attack, the Aramco oil facility has cut down production by 5.7 million barrels per day (mbpd) which has affected the global oil supply by 6 per cent. Though this won’t result in a shortage of oil supply in India, the impact will be in the form of a rise in prices, reported The Hindu.

Taking in view the past losses in oil production, if the price of oil crosses $70-75 barrel, the government will have problems in managing the price and will have to ponder over ways to bring back the administered pricing mechanism. The latest hike of $6-7 per barrel in oil prices is directly proportional to the rise in prices and hence, will certainly have an immediate impact in India.

As far as the aviation sector is concerned which is one of the largest consumers of oil, the rise in oil prices will add Rs 50 crore to its monthly fuel bill. An air India official said a 10 per cent rise in the aviation turbine fuel will cost them additionally.

Underlining that there won’t be any immediate impact on the monthly fuel bill of airlines, he said if the situation continued, airlines will have to raise airfare.

The petrol and diesel prices are modified every day in the morning at about 6 am, though today there was no fluctuation in the rate, the price hike is expected to go up in the coming days.

Hindustan Petroleum Corp Ltd (HPCL) reiterated that the price of petrol and diesel are likely to increase if the crude price continues to shoot up by 10 per cent.

Reviewing the overall crude oil supplies for the month of September, Union Minister of petroleum and natural gas Dharmendra Pradhan asserted that there would be no supply disruption to India and added that the Centre was closely monitoring the situation.

Source: NewsX

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