The Indian basket of imported crude oils gained nearly $3.50 a barrel during last week even as petrol prices in the country touched their highest levels since Prime Minister Narendra Modi assumed office three years ago, official data showed on Monday.
The Indian basket, comprising 73% sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on the weekend on Friday at $53.63 per barrel, according to the petroleum ministry. The oil basket had gained over a dollar at the start of last week on Monday to close at $51.34 for a barrel of 159 litres.
Meanwhile, under the daily revision of fuel prices, petrol in Mumbai on Monday cost Rs 79.41 a litre, breaching the level it last touched in August, 2014.
Petrol price was hiked by 13 paise a litre and diesel by 25 paise per litre, applicable from 6 am on Monday. Petroleum products do not come under the Goods and Services Tax (GST) and prices vary at locations according to state taxes.
On Monday, petrol per litre cost Rs 70.30 in Delhi, Rs 73.05 in Kolkata and Rs 72.87 in Chennai.
Similarly, diesel price on Monday was Rs 58.62 in Delhi, Rs 61.27 in Kolkata, Rs 62.26 in Mumbai and Rs 61.73 in Chennai.
Earlier this month, Petroleum Minister Dharmendra Pradhan said the dynamic pricing regime would continue despite petrol prices going up by over Rs 7 per litre since the scheme was introduced pan-India from mid-June.
He said dynamic pricing ensures that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end-users.
“Daily revision in prices is good. When we started daily revisions on June 16, rates dropped in the first fortnight. Thereafter, it has increased mainly because of rise in global oil prices,” he said.
Daily revision allows any fall in international oil rates to be passed on to consumers immediately rather than having to wait for 15 days as in the old system, he added.
“Should prices be hiked by Rs 2.50 or Rs 3 per litre in one go or they should be spaced out in small doses,” he asked.
Earlier, the state-run oil marketing companies used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight.
Dynamic fuel pricing is followed in many developed countries and India opted for it as a response to the recent volatility in global crude oil prices.
The basket of crude oils of the 13-nation Organisation of Petroleum Exporting Countries (OPEC) breached the psychologically-important $50-a-barrel-mark also last week, to close at $50.36 a barrel on September 4. As per latest data, the OPEC basket closed on Friday at $52.53.
Last month, two of OPECs biggest members — Saudi Arabia and Iraq — expressed their commitment to abide by an agreement to cut oil production that was signed earlier between OPEC and 10 other nations.