Last month, OPEC+ countries decided to increase crude oil production from August. So Russia, including Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates (UAE), have increased their production from this month. Russia is an ally of OPEC. This move may bring down crude oil prices in the coming days. If this happens, then petrol and diesel can be cheaper by up to Rs 5. Currently, crude oil remains close to $ 75 per barrel, which can come up to $ 65. Let us tell you that in most parts of the country, the price of petrol is beyond 100.
From this month, OPEC+ countries together will increase production by 4 lakh barrels on a daily basis every month. In September, production will increase by 8 lakh barrels per day compared to now. According to this calculation, production will be 1.2 million barrels per day in October, 1.6 million barrels per day in November, and 2 million barrels daily in December.
Let us tell you that in the midst of the Corona crisis, OPEC Plus countries cut production by 10 million barrels on a daily basis last year. It picked up gradually, but on a daily basis, it is still cut by 5.8 million barrels. Due to this, the price of crude oil has reached $ 75 / barrel.
Energy sector expert Narendra Taneja says that the public should not expect much relief from the increase in the production of crude oil, because the main reason for the cost of petrol and diesel is the heavy tax on it. Still, the base price of petrol in the country is Rs 41 and that of diesel is Rs 42 per liter, but after taxes levied by the central government and state governments, their price increases up to 3 times.
Taneja says that 60% of the price of petrol and diesel is tax. Currently, the base price of petrol is Rs 41 and Rs 42 per liter. Whereas in Delhi, the public has to pay Rs 101.84 for petrol and Rs 89.87 per liter for diesel. In such a situation, it is difficult for the general public to get relief without cutting taxes.
Economic and business journalist Shishir Sinha says that the price of crude oil may come down due to an increase in production, but according to the way the prices of petrol and diesel have increased, it will not decrease accordingly. According to the data, the consumption of petrol-diesel in July 2021 has crossed the pre-Covid level.
IIFL Securities Vice President (Commodity & Currency) says that due to the increase in production of crude oil, its price may come down to $ 65 per barrel in the coming days. With this, the price of petrol and diesel can come down by 4 to 5 rupees.
According to the Petroleum Planning and Analysis Cell (PPAC), when the Modi government came to power in May 2014, the base price of petrol was Rs 47.12 per liter, which came down to Rs 41 in July 2021. That is, it declined, but since then till date, the prices of petrol have increased by 43%. In May 2014, petrol in Delhi was Rs 71.41, which has now reached Rs 101.84 per liter.
Petrol or diesel prices mainly depend on 4 factors. These include the price of crude oil, the price of the US dollar against the rupee, taxes, and the level of demand for them. The biggest reason for this is tax.
On August 2, 2020, the price of crude oil was close to $ 44 per barrel, but due to decreasing production and increasing demand, its price increased continuously. Talking about today, it is currently running around $ 75.
We procure more than 85% of our crude oil requirement from outside. We have to pay for it in dollars. In such a situation, due to the increase in the price of crude oil and the strengthening of the dollar, petrol and diesel start becoming expensive. Crude oil comes in barrels. One barrel means 159 liters of crude oil.
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