Petrol, diesel prices on decline mode for nearly two weeks; oil extends gains as US output cut hopes grow

On Wednesday, petrol and prices were cut up to 30 paise and 25 paise respectively due to the decline of crude prices

FP Staff March 11, 2020 14:08:59 IST
Petrol, diesel prices on decline mode for nearly two weeks; oil extends gains as US output cut hopes grow
  • On Wednesday, petrol was sold in Delhi at Rs 70.29 per litre, Mumbai Rs 75.99, Chennai Rs 73.02, Hyderabad Rs 74.72, Kolkata Rs 72.98 and Bengaluru Rs 72.70 a litre

  • Since 27 February this year, petrol prices declined by up to Rs 1.67 while diesel prices fell by Rs 1.64 in the country

  • Oil prices climbed for a second day on Wednesday as hopes US producers would cut output lent support, but gains were capped by growing doubts about Washington’s stimulus package to fight the coronavirus

Fuel prices have been on the decline mode for nearly two weeks now. Till Wednesday, the petrol and diesel rates dipped by nearly Rs 2.

Crude witnessed the biggest fall since 2016 when the prices crashed by 30 percent following a price war between Saudi Arabia and Russia on Monday amid falling demand due to coronavirus outbreak.

Meanwhile, crude oil prices climbed for a second day on Wednesday as hopes that US producers would cut output lent support.

On Wednesday, petrol and prices were cut up to 30 paise and 25 paise respectively due to the decline in crude prices.

Petrol diesel prices on decline mode for nearly two weeks oil extends gains as US output cut hopes grow

Representational image. Reuters.

Accordingly, petrol was sold in Delhi at Rs 70.29 per litre, Mumbai Rs 75.99, Chennai Rs 73.02, Hyderabad Rs 74.72, Kolkata Rs 72.98 and Bengaluru Rs 72.70 a litre.

On the other hand, in Delhi, diesel was priced at Rs 63.01 per litre, Mumbai Rs 65.97 per litre, Chennai Rs 66.48, Bengaluru Rs 65.16, Hyderabad 68.60 and Kolkata Rs 65.34 a litre.

Since 27 February this year, petrol prices declined by up to Rs 1.67 while diesel prices fell by Rs 1.64.

This year, petrol prices touched its peak at Rs 76.01 and diesel at Rs 69.17 on 11 January in Delhi. Despite this, the petrol price fell by Rs 4.85 this year, while diesel rates dipped 4.95 so far this year since the start of 2020.

On Monday, the crude price plummeted by 30 percent after Saudi Arabia started a price war with Russia by slashing its selling prices and hiked the output amid falling demand because of the coronavirus outbreak.

Brent crude futures fell by as much as $14.25, or 31.5 percent, to $31.02 a barrel. That was the biggest percentage drop since 17 January 1991, at the start of the first Gulf War and the lowest since 12 February 2016. It was trading at $35.75.

Saudi Arabia, the world’s biggest oil exporter, is attempting to punish Russia, the world’s second-largest producer, for balking on Friday at production cuts proposed by the Organisation of the Petroleum Exporting Countries (OPEC).

OPEC and other producers supported the cuts to stabilise falling prices caused by the economic fallout from the coronavirus outbreak.

Saudi Arabia plans to boost crude output above 10 million barrels per day (bpd) in April after the current supply deal between OPEC and Russia, - known as OPEC+ - expires at the end of March, two sources told Reuters on Sunday.

Saudi Arabia has opened the war by cutting its official selling prices for April for all crude grades to all destinations by between $6 to $8 a barrel.

China’s efforts to curtail the coronavirus outbreak has disrupted the world’s second-largest economy and curtailed shipments to the largest oil importer.

The spread to other major economies such as Italy and South Korea and the burgeoning cases in the United States has increased the concerns that oil demand will slump this year.

On Wednesday, oil prices climbed for a second day as hopes that the US producers would cut output lent support, but gains were capped by growing doubts about Washington’s stimulus package to fight the coronavirus , which continues to spread globally.

Brent crude futures rose $1.26, or 3.4 percent, to $38.48 a barrel, while US West Texas Intermediate (WTI) crude gained $0.91, or 2.7 percent, to $35.27 a barrel.

They have recouped nearly a half of the Monday’s 25 percent loss, which was triggered by the clash of oil titans Saudi Arabia and Russia.

“Expectations that US shale oil producers will need to trim output helped improve the market sentiment,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

Oil and equity markets staged solid rebounds on Tuesday after the previous day’s pummelling, on signs of co-ordinated action by the world’s biggest economies to cushion the economic impact of the epidemic.

With inputs from agencies

Updated Date:

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