NEW DELHI: The global crude oil market is witnessing a sharp spurt in demand as the overall global economy has begun to pick up pace after vaccination drives across advanced economies continue to increase the number of fully vaccinated individuals in the world.
Despite the sharp rise in cases in India among the three largest oil consumers in the world brent crude oil prices rose to just below the $70 per barrel mark on Wednesday. The day’s high was $69.95 per barrel, though the commodity fell to $69.34 per barrel by 11 pm.
Increasing crude oil prices are a matter of concern to Indian fuel consumers who already are among the most highly taxed in the world. While petrol and diesel prices had remained stagnant over the past few weeks as five major states went to the polls, oil marketing companies hiked petrol and diesel prices on both Tuesday and Wednesday.
Petrol prices were by 19 paise per litre and diesel by 21 paise a litre on Wednesday. The hike brings the cost of Petrol in the national capital to Rs 90.74 a litre and diesel to Rs 81.12 per litre. Rates have been increased across the country and vary from state to state depending on the local incidence of Value Added Tax (VAT). On Tuesday, prices had been hiked by 15 paise per litre for petrol and 18 paise on diesel.
Experts note that going forward, even the sharp decrease in Indian oil consumption if lockdowns are made more stringent in an effort to curtail the spread of the virus is not likely to keep crude oil prices low. “There is strong demand being seen in the international market, primarily due to strong US demand... The country is seen recovering strongly,” said a senior OMC executive, adding that OMC margins for petrol are quite low currently.