Petrol, diesel price cut likely on fall in crude oil prices

Oil marketing firms are likely to cut the price of petrol and diesel this week as crude oil prices have hit nearly six-year low.

Oil prices tumbled by 5 per cent to near six-year lows on Tuesday, with the Brent crude international benchmark briefly trading at par to US prices for the first time in three months as some traders moved to take advantage of ample US storage space.

February Brent crude prices had dropped by 40 cents since its last settlement to $46.19 a barrel by 08:08 am. US crude for February was trading 29 cents lower at $45.60 a barrel.

The price of petrol in Delhi has now come down to Rs 61.33 per litre from Rs 72.26 a litre last April. The price of diesel has also fallen from Rs 55.49 to Rs 50.51 during this period.

Petrol and diesel prices were cut by Rs 2 per litre on December 16, 2014 on fall in international oil prices.

There is a supply glut in the international market with the US pumping out more shale oil and the Organization of the Petroleum Exporting Countries deciding not to cut output for fear of losing market share.

Crude oil prices have come down to less than half of the $115 per barrel in June 2014. Some experts expect crude oil prices to come down in the $40 if weekly oil inventory numbers for the US show another supply build up.