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Petrol and diesel prices set for a sharp drop

Petrol and diesel rates are set for a sharp drop after global crude oil prices tumbled nearly $7 a barrel in nine days.

It is indeed a good piece of information to the public. It will not be an exaggeration to say that almost many vehicle-owners, be it a two wheeler or even a four wheeler, woke up every day morning till recently with the first thought, ‘How much more to pay today for oil?”

 State oil companies fix domestic rates of petrol and diesel based on international fuel prices, the exchange rate and taxes.

They have the freedom to pass on all hikes and reductions daily to consumers, but have lately begun to wait for signals from the government to do so. That’s why local prices don’t always mimic international trends.

Lower prices would bring relief to the public first of all, and the government which has faced public anger over rising prices and calls for duty cuts to bring down local fuel rates.

 International crude oil prices have declined sharply in the past 10 days, with Brent going close to $72 a barrel on Thursday. The prospect of increased supply from key producing countries and a fear of trade war between the US and China hurting oil demand have been weighing on the global rates.

Hints of the US probably agreeing to offer waivers to India and some other key importers of Iranian oil have lessened worries that a significant share of supplies from the Islamic Republic would go off the market.

 Saudi Arabia, Russia, the US and other key producers are expected to raise output to meet new demand, as well as any shortage due to Iranian supply cut.


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