Fuel prices reduced for 20th consecutive day, Brent barrel at $70

Chennai: Petrol prices that touched record high rates, crossing Rs 90 at certain parts of the nation owing to rising crude prices are expected to come down as measures have been undertaken at the global level to increase supply.

Reports have stated that the decline in global crude oil prices is expected to continue, which will have a moderating impact on inflation.

Brent crude prices have now declined to less than $70 per barrel (bbl), SBI Ecoflash said in a report. Crude prices that touched $86/bbl in October, started to decline recently. In February this year, crude prices were at $63/bbl.

In the past one month, crude prices declined by around $16/bbl as some nations got waivers to import oil from Iran, amid signs that other OPEC members will pump more to offset any supply gap.

As a result of this, fuel prices have been slashed for the 20th straight day with OMCs reducing another 17 paise and diesel by 16 paise at the national capital today. Prices were at Rs 77.89 per litre of petrol and Rs 72.58 for the same quantity of diesel.

Including today’s cut, fuel prices have come down by almost 10 per cent after witnessing a relentless hike in October.

‘We believe that the decline in oil price might continue. Even our analysis of global growth vis-a-vis oil prices suggest that since 2012, oil prices in the first half are always greater than or equal to the second half of a year,’ the report said.

Decline oil prices will also help the CPI inflation to remain moderate at 3.5 per cent for the next couple of months before reaching around four per cent by March 2019, it said.

‘For October, we expect inflation at between 3.5-3.6 per cent. Furthermore, the inflation may be close to three per cent for November or a tad lower. There is continued deceleration in food prices particularly in rural areas. The MSP pass-through is negligible,’ it said.

The government needs to ensure the procurement plan is implemented aggressively ahead of the Kharif season, the report added.

Today’s rates

Delhi: P- Rs 77.89, D- Rs 72.58

Mumbai: P- Rs 83.40, D- Rs 76.05

Chennai: P- Rs 80.90 , D- Rs 76.72

Kolkata: P- Rs 79.81 , D- Rs 74.44

 

No tax cut for ATF
Aviation companies will not get a cut in the levy on Aviation Turbine Fuel (ATF) which they had demanded from the government, sources have confirmed.

The government is not likely to accept the plea from various airlines, backed by the Ministry of Civil Aviation, that States and oil marketing companies (OMCs) should reduce the taxes, as it happened with petrol and diesel.

Junior minister for Civil Aviation Jayant Sinha had met finance minister last month to urge him to bring aviation turbine fuel (ATF) under the ambit of GST. Ways to lower input costs for airlines were also discussed in the meeting.

The Finance Ministry clarified that decision to bring ATF under the GST framework will be taken by the GST Council and that it will happen when wider decision to subsume petrol and diesel is taken.

Govt owned oil manufacturing companies hiked aviation turbine fuel price by 7.25 per cent last month, thus taking the ATF prices to the highest mark of Rs 74,567 per kilo-litre (kl) in Delhi under the present government.

 

NT Bureau