Rama Krishna Sangem
We all thought that petrol and diesel prices will be up on the evening of March 7, immediately after the 5 state assemblies elections are over. That hasn’t happened even by March 15. Good news is petrol prices not hiked.
Even if the prices go up, the hike will not be as steep as we feared. This is because of various reasons: First, PM Modi wanted oil companies to wait for some more time.
Global Prices Coming Down
Second, global oil prices that went up after Russian war on Ukraine on February 24, are now coming down. In the first week of March, the prices went up to $ 140 per barrel in the global markets. Russia threatened that the prices will go up to $ 300 per barrel, as the US banned its oil exports.
But, luckily, global oil prices came down below $ 100 per barrel mark on March 15 – $ 99 per barrel in Brent market and $ 95 per barrel in NYMEX (New York Mercantile Exchange).
That’s good news. The cooling off of oil prices is due to intensified talks between Russia and Ukraine this week. Ukraine president Zelensky’s readiness to talk to Russian leader Putin is a reason for this.
Saudi’s Move Eased Prices
On the other hand, the US and China have decided to explore ways to end the Ukraine war as soon as possible. The US efforts to lift sanctions on Iran and Venezuela a few years ago, so that oil imports from the countries would be increased, is another reason for the softening of global oil prices. Saudi Arabia’s readiness to increase oil production too contributed to the price stabilization.
We expected the petrol prices would touch Rs 135 per liter this month end. We should remember that the oil prices haven’t been increased after November 2, when the election schedule was announced by the Election Commission.
Then, the international oil prices were $ 62 per barrel. By January 2022, the prices went up to $ 92 per barrel. In between came Russia war on Ukraine, which triggered a global crisis of sorts. The global oil prices went up to $ 140 per barrel. The US decision to ban oil imports from Russia aggravated the problem further. Russia said, the prices will go up to $ 300 per barrel.
If that happens, petrol prices would have touched Rs 200 per liter. Luckily, that hasn’t happened. The prices haven’t been increased even after March 10, the counting of votes. On March 15, the indications suggest Prime Minister Narendra Modi has decided not to increase the prices in the next few days.
Modi and the BJP leadership have decided not to increase petrol price immediately after the polls. “Probably, they didn’t want to burden the people as a “punishment to electing BJP in UP and three other states,” said an executive of Indian Oil in Hyderabad. He is right. PM Modi knows it well. BJP has to face many more elections in the next two years, with grand finale of LS polls in 2024.
If things go well, the petrol price hike will be minimal may be around Rs 10 per liter, that too after a few days. That’s good news to us all. The Centre is trying to bear the burden of increased oil prices through two methods. One, by absorbing the burden through piled foreign exchange reserves. Two, through slashing additional taxes imposed in the last two years.
So, hike will be there, but not as huge as we feared.