Fall in Global Oil Prices, Unlikely to Deregulate Diesel Prices

Diesel-PricesCrude prices have remained depressed mainly due to four factors: Rise in output from Iraq and Libya in spite of the unrest in the region, receding hopes of an immediate uptick in the Eurozone economy, tepid growth in China’s appetite and new players such as Russia and US nibbling at the markets fed by traditional suppliers.

Decline in fuel prices is due to global benchmark oil prices fall, dropping below $90 a barrel yesterday as Iran joined Saudi Arabia in a discount war.

Fall in global oil prices would allow the government to breathe easy as the macroeconomic environment improves substantially. But the Centre is unlikely to deregulate diesel pricing in a hurry, opting for periodic price modulation to avoid future shock.

Medaram Jathara

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