Crisis between Russia and Ukraine, along with sustained demand, is likely to keep global crude oil prices in the range of USD95-to- USD125 per barrel in the short term.
As a result of the global rise in crude oil prices caused by the geopolitical situation, India's domestic petrol and diesel prices are likely to rise by Rs 15-22 per litre.
On or after March 7, the last day of voting in the present state assembly elections, it is largely believed that the OMCs will modify the current pricing. A reduction in excise duties, on the other hand, may mitigate the impact on gasoline and diesel prices to some extent, but not altogether.
India currently imports 85 percent of its crude oil. Furthermore, a general inflationary trend will be triggered by the cascading effect of rising fuel costs.
In January, India's Consumer Price Index (CPI), which measures retail inflation, surpassed the Reserve Bank of India's target range. High commodity costs were cited for the increase. According to industry estimates, a 10% increase in crude oil prices contributes about 10 basis points to CPI inflation. Brent crude oil was trading at USD113.76 per barrel on Friday, down from a 10-year high of USD119.84 per barrel the day before.
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