• 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

    Brent rose 52 percent this year and WTI climbed around 45 percent, the largest annual gains since 2009, when the benchmarks rose 78 percent and 71 percent respectively. As a result, India’s crude purchase cost has risen to $54.55 a barrel from an average of $44.46 in November. Vernon Hargreaves III Jersey

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