New Year begins with crude shock for consumers as all fuels become costlier

The New Year started on a crude note for consumers as fuels across the board became costlier due to an uptick in global oil prices in the wake of a global production cut deal among major oil exporters, including Opec and Russia.

State-run fuel retailers raised petrol price by Rs 1.29 a litre, the third in a month. Diesel rate was hiked by 97 paise a litre, marking the second increase in a fortnight. The actual price, however, at the pumps will be higher since the revised prices are excluding local levies.

The price of subsidised LPG cylinder was also raised by Rs 2 in line with a decision to raise prices every month till the price attains parity with market rates.

Jet fuel also became costlier by 8.6%, or Rs 4,161 per kilolitre (kl), to Rs 52,540.63 per kl in Delhi. While airlines are loathe to pass on reduction in the price of fuel — which accounts for 40-50% of operational costs — they are quick to raise fares on costlier fuel. Jet fuel rates were reduced by 3.7% last month.

Global benchmark oil, Brent, which has nearly 30% weightage on India’s crude bill, has risen 52% in 2016, especially pushed by the production cut deal. after in this year, substantially oil prices. Read more…