Fuel prices touch new high as Brent hits $80 per barrel
NEWDELHI:Fuel prices in India hit all-time highs on Monday with a litre of petrol costing more than ₹90 in Mumbai, stoking inflation fears and adding pressure on the government to cut taxes on fuel.
On Monday, vehicles in Mumbai tanked up at ₹90.08 for a litre of petrol and ₹78.58 for diesel, while in Delhi prices have hit ₹82.72 and ₹74.02 per litre, respectively. The price of Brent crude has touched $80 per barrel for the first time since 2014.
The Organization of the Petroleum Exporting Countries (Opec), which accounts for around 40% of global oil production on Sunday, ignored US president Donald Trump’s call to boost supply, prompting traders worldwide to wonder if oil prices will cross the $100-mark yet again. The highwater mark of international crude oil prices is $147 per barrel, clocked in July 2009. Increasing tensions between the US and Venezuela, the US demanding an end to all imports of Iranian oil by early November, and the rupee’s performance as Asia’s worst performing currency of the year have compounded the situation and put India, the world’s third-largest oil importer, in a difficult spot.
S&P Global Ratings said in a Monday report that the agency expected Brent price to be at $70 for the rest of 2018, $65 for 2019, and $60 for 2020.
“Rising crude prices and the recent 10-15% weakness in the Indian rupee translate into higher fuel prices for consumers in a deregulated fuel price environment, such as that in India. This puts pressure on consumers and results in higher inflation, a sensitive subject given impending federal and state elections over the next 12 months,” the S&P Global Ratings wrote in its report.
(Bloomberg contributed to this story.)