Global crude oil prices sink to new low, but India cuts fuel prices by a few paise a litre

The government-owned oil marketing companies have effected the mandatory mid-month fuel price change but motorists in India have little to cheer about. From the midnight of January 15-16, the retail price of petrol has been cut by a meagre 32 paise a litre and diesel by 85 paise a litre.

With this, the price of petrol per litre in the four metros is: Delhi – Rs 59.03, Kolkata – Rs 64.87, Mumbai – Rs 66.09 and Chennai – Rs 59.45. Diesel price now stands changed at: Delhi – Rs 44.18, Kolkata – Rs 48.07, Mumbai – Rs 51.25 and Chennai – Rs 45.36.

Despite global crude oil prices hitting a record 12-year low of US$ 29.72 /Rs 1,877 (as of January 15, 7pm IST) for a barrel of oil, there is little corresponding effect of the plunging price in the Indian market. In June 2014, a barrel of Brent crude cost $110 / Rs 6,948 and by early 2015, this had dropped sharply to $60. Today, it costs half of that. 

One bbl or barrel is the unit of volume for crude oil and petroleum products and equals 42 US gallons or 35 UK (imperial) gallons, or approximately 159 litres. Do the math at US$ 29 a barrel and you’ll realise petrol in India costs more than a bottle of mineral water.