It is sad that the common man is again burdened with the hike in fuel prices.The tiny doses in surge over the last ten days have led to a hike of about Rs 5/ per litre each on petrol and diesel.Crude on the international market touched a two decade low of of less than $18/ barrel in the second week of April and started rebounding after an increase in the production cuts to clear the glut. It is now at $36 after reaching $40.
There is a probability for crude to dive further and remain in a comfortable zone through out this fiscal due to various reasons : 1.huge pile of supply inventories of about 1 billion barrels (1 barrel ~160 litres) 2.diminished demand in the last couple of months 3.probability of a resurgence of second wave of corona 4 fears of recession looming large on major economies and consequent prolonged slump in demand.
As far as India is concerned, it has been in a quite a comfortable price band since 2014 and more so in the last three months.It touched as high as $145 in July 2008. It was at $105 in July 2014 and fell to $66 in December the same year and touched as low as $26 in Feb 2016.The annual average price has never crossed $ 75 after 2014-15.
A rational perception prompts me to suggest that a fraction, if not in entirety of the benefit from this advantage is passed on to the common man / consumer so that more money is left in the hands of masses to spend and boost consumption.
See you again on 18th at 9 pm
✍️
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