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Saudi Arabia extends discount on crude to India, other Asian consumers

Sources said that Saudis have finally acknowledged the concerns in the Asian market that hosts four of the top five consumers

Monday February 8, 2021 12:34 PM, ummid.com with inputs from IANS

Crude Discount

New Delhi: World's largest oil producer Saudi Arabia has decided against raising crude supplies for March delivery to Asian consumers while raising the prices for other major consumers in the US and Europe.

Sources said that Saudis have finally acknowledged the concerns in the Asian market that hosts four of the top five consumers including China, India, Japan and Korea.

What this means is that even though crude prices may rise higher from the present levels of $60 a barrel, India along with other Asian consumers would continue to get discounts over the prevailing price.

For India, the decision by Saudi Arabia would not have come at a more opportune time. Auto fuel prices here have risen to historic high levels with petrol prices nearing unprecedented level of Rs 100 a litre in Mumbai.

How India decides Petrol, Diesel prices?

Petrol, diesel and other oil product prices in India are determined on the basis of petroleum product price in the global markets and not crude price. But movement in benchmark crude has a bearing on pricing across the product categories.

Petrol and diesel prices had risen sharply on Thursday and Friday, taking up the pump price of the auto fuels by 65 paise per litre.

With this retail price of diesel went to Rs 77.13 a litre in Delhi while petrol prices jumoed to a new high level of Rs 86.95 a litre in the capital.

The petrol and diesel prices have increased 12 times in 2021 with the two auto fuels increasing by Rs 3.24 and Rs 3.26 per litre respectively so far this year.

The last few increases in the pump prices in petrol and diesel has taken its price to record levels across the country in all major metro cities and other towns.

The current price rise is largely on account of steep increase in central taxes of petrol and diesel and firm crude prices. The Budget has also imposed a new agriculture infrastructure and development cess.

 

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