Crude oil prices reached $140 per barrel in March this year after July 2008. Since then, it is trading close to $76 per barrel, the lowest level this year, with a 46 percent fall.
If crude oil is estimated in terms of liter and rupee, then the price should decrease by more than Rs 33 per liter in 9 months. Even after this, there has not been a drop in the prices of petrol and diesel in the country. The fall in crude oil prices is because the supply uncertainty that was there after the Russia-Ukraine war has faded.
What happened when crude became expensive?
When crude was $140 a barrel (159 liters in a barrel) in March, retail inflation was at an 8-year record level of 7.79% in April. To reduce inflation, RBI started cutting repo rates in May. It is expected that when the November inflation figures come this week, they may remain at 6%. The impact of costlier oil is more on freight transportation. The domestic rates of petrol and diesel depending on the international prices of these fuels. But since April, domestic rates have stabilized, as companies sold fuel at prices below the market and incurred huge losses. Domestic companies will first recover their losses before passing on the benefits of the global price drop to customers.
Understand maths in rupees like this
The current price of Brent crude is $ 76.10 per barrel i.e. Rs 6,272.20 per barrel. If you look at it per liter, then Rs 6,272 is 159 liters. That is, the price became Rs 39.45 a liter. If you convert 140 liters per barrel i.e. Rs 11,538 per barrel per liter in the month of March, it was Rs 72.57 per liter. Brent has become cheaper by Rs 33.12 per liter in 9 months.