Petrol Diesel Price: Will the price of petrol and diesel increase now? know the reason
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Petrol Diesel Price : Will the price of petrol and diesel increase in the country? Actually, this question is arising because after the Ukraine war, the exemption or concession that India was getting on the purchase of crude oil from Russia has now reduced considerably. On the other hand, the units which have been ‘arranged’ by Russia for the transportation of this oil, are charging a much higher rate than normal from India. Sources have given the above information. Russia is charging Indian refinery companies less than the price cap of $ 60 per barrel imposed by the West. But it is charging $11 to $19 a barrel to transport the crude. This is double the normal fee for delivery from the Baltic and Black Seas to the west coast.
Three sources with knowledge of the matter said that the cost of transportation from Russian ports to India is sitting at $11-19 a barrel. This is comparatively higher than the transportation charges from the Persian Gulf to Rotterdam. Following Russia’s invasion of Ukraine in February last year, Russian oil was embargoed by European buyers and some countries in Asia like Japan. Due to this, Russian Urals crude oil started trading at a much lower price than Brent crude oil i.e. the global benchmark price. However, the discount on Russian crude oil, which was $30 per barrel in the middle of last year, has now come down to $4 per barrel.
Companies convert crude oil into fuels like petrol and diesel.
Indian refinery companies convert crude oil into fuels like petrol and diesel. Right now these companies are the biggest buyer of Russian oil. In this matter, India has left China behind. China’s import of crude oil from Russia has come down significantly due to sluggish economy and massive electrification of vehicles. To establish their ‘penetration’ on Russia’s cheap crude oil, Indian refinery companies have increased their purchases very fast. Before the Ukraine war, Russia’s share in India’s total crude oil purchase was only 2 percent, which has increased to 44 percent today. But now the discount or concession on Russian crude oil has reduced considerably.
Separate talks for crude oil deals
This is because public sector Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited (BPCL), Mangalore Refinery and Petrochemicals Limited and HPCL-Mittal Energy Limited along with private refinery companies such as Reliance Industries Limited and Nayara Energy Limited is in separate talks with Russia for crude oil deals. Sources said that this discount could have been higher, if the public sector units had discussed it together. At present, 20 lakh barrels of crude oil is coming from Russia every day. In this, the share of public sector units is about 60 percent.
Crude oil is being received from Russia at less than $60 per barrel
Before Russia’s attack on Ukraine, India used to buy 44,500 barrels of crude oil per day from Russia in the period of 12 months ending February 2022. During the last few months, India’s purchase of Russian crude oil via sea route has crossed that of China. Sources said that Indian refinery companies buy crude oil from Russia on the basis of its supply. Due to this, Russia has to make arrangements for transportation and insurance of oil. Although crude oil is available from Russia at a price of less than $ 60 per barrel, but overall this amount is sitting at $ 70 to $ 75 per barrel.
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