"A price cap on Russia oil is a powerful tool -- one part of the tool in our agenda to put downward pressure on global energy prices in a way that will benefit consumers in the US and globally," White House Press Secretary Karen Jean-Pierre told reporters during her daily news conference here Friday.
"And we are determined to implement this policy in a way that achieves those goals," she said.
Earlier in the day, G7 finance ministers announced a cap on the price of Russian oil, which they said would put pressure on global energy prices while denying Putin revenue to fund his brutal war in Ukraine.
As per the announcement, the G7 countries, along with other allies and partners, plan to prohibit the provision of services that enable maritime transportation of such oil and products unless purchased at or below a price level determined by the coalition of countries adhering to and implementing the price cap.
"By committing to finalise and implement a price cap, the G7 will significantly reduce Russia's main source of funding for its illegal war, while maintaining supplies to global energy markets by keeping Russian oil flowing at lower prices," US Treasury Secretary Janet Yellen said.
"While we have seen energy prices ease in the United States, energy costs remain a concern for Americans and continue to be elevated globally. This price cap is one of the most powerful tools we have to fight inflation and protect workers and businesses in the United States and globally from future price spikes caused by global disruptions," she said.
Responding to a question, Jean-Pierre told reporters that the impact of G7 efforts to implement a price cap is already bearing fruit.
"Reports show that Russia is already offering steep discounts -- as much as 30 per cent -- and long-term contracts to some countries. This also demonstrates that Russia is planning to continue supplying its oil and willing to swallow bigger discounts," she said.
"A price cap will give more countries better leverage to strike deals with Russia. We will further work in the coming weeks to determine the price cap level; release further information, including technical guidance for market participation; and announce our coalition partners as well," said the press secretary.
The United Arab Emirates had appeared to push the members of the Opec producer group to raise output, only for the UAE's energy minister to quash hopes. The oil price rose more than 5 pert cent, after a 17 per cent fall on Wednesday.
"To suggest the oil market is confused would be an understatement," said analyst Stephen Innes.
US President Joe Biden and other leaders have pledged to try to ease the price pressures for households. Officials from the US have been in talks with oil producers aimed at boosting supply.
"We favour production increases and will be encouraging Opec to consider higher production levels," Ambassador Yousuf Al Otaiba said in a statement tweeted by the UAE Embassy in Washington, BBC reported.
But Energy Minister Suhail al-Mazrouei said later that the Gulf state remained committed to the existing Opec monthly output agreement, which fixes how much crude is produced by member countries.
Oil prices have jumped more than 30 per cent since February 24, when Russia launched military attack against Ukraine, touching $139 a barrel at one point this week.
The oil price had fallen back to about $106 a barrel at one point on Wednesday, but by Thursday morning it was trading at around $116 per barrel.
Mishra stated that the Centre and State Government are blaming each other but both are equally responsible for the hike in taxes on petroleum products.
While the Centre has denied to reduce the taxes imposed on the petroleum products, it has asked the State to either abolish VAT or reduce the prices of petrol and diesel.
Mishra later urged to at least reduce the prices for the poor consumers and farmers if not for all.
"During Congress reign, the international market price was Rs 135 while it is now Rs 72. So why is the Central Government increasing the price rather than decreasing.Petrol, diesel, kerosene and gas, all these should be included in the GST framework," suggested Congress Chief Whip Tara Prasad Bahinipati.
"The State Government should decrease the VAT in view of the security and interests of the consumers. Secondly, as State Finance Minister is a member of the Council, he should ensure to include petrol and diesel in GST ambit,” BJP MLA Pradip Purohit said.
On the other hand, Sashi Bhusan Behera, Odisha Finance Minister said that inclusion of petrol and diesel in GST depends upon the agenda of the GST Council. He said, "The proposal the LoP presented in the Assembly today can only be discussed after an agenda comes from the GST Council. Whenever the agenda comes, the state government is ready to hold discussions with other States and put forth its stand."
The dealer commission, which is a part of price of the fuel that consumers pay, is currently Rs 2.55 per litre for petrol and Rs 1.65 per litre for diesel.
The All India Petroleum Dealers Association is likely to hike commission rates by Rs 1 per litre hike for petrol and Rs 0.72 litre for diesel from today.
Even though petrol and diesel prices are revised on a daily basis in sync with international crude prices, the hike in dealer commission would further hike the rates.
The move will hike the increment in fuel prices more while the decrease in rates will be lesser.
Dealer association are unhappy over the new system of daily change in retail prices of fuel rates (earlier prices were adjusted on 1st and 16th of every month). They claim that the new system lessens their margin since they have to face inventory losses when crude prices and subsequently retail prices go down.
The West Texas Intermediate (WTI) for September delivery rose $0.45 to settle at $65.91 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery rose $0.40 to close at $71.83 a barrel on the London ICE Futures Exchange, Xinhua reported.
The market was under pressure earlier in the week as official data showed the US crude inventories rose unexpectedly recently.
The Energy Information Administration said in its weekly report on Wednesday that US commercial crude inventories rose by 6.8 million barrels in the week through August 10, way higher than market estimates of a decrease of 2.5 million barrels.
WTI and Brent oil prices rebounded slightly on Thursday and Friday after touching the lowest levels in months on Wednesday.
On the data front, the number of US oil drilling rigs were unchanged this week at 869 rigs, according to a weekly report from energy company Baker Hughes on Friday.
The US Energy Information Administration (EIA) said on Wednesday that the country's crude inventories climbed by almost 5 million barrels to 533.1 million last week, far outpacing forecasts for an increase of 2.8 million, Xinhua news agency reported.
Analysts said the rising output also weighed on the production reduction by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies.
The West Texas Intermediate for May Delivery erased $0.34 to settle at $47.70 a barrel on the New York Mercantile Exchange, while Brent crude for May delivery decreased $0.08 to close at $50.56 a barrel on the London ICE Futures Exchange.
In Delhi, petrol was sold for Rs 69.93 per litre, down from Rs 69.99 a litre on Saturday.
In Kolkata, Mumbai and Chennai, petrol was sold for Rs 72.19, Rs 75.63 and Rs 72.64 a litre, respectively, against the previous levels of Rs 72.25, Rs 75.69 and Rs 72.70 per litre.
Fuel prices declined for the fourth straight day on Sunday. The price of the other key transportation fuel, diesel, fell 9-10 paise in the four cities.
Diesel price in Delhi, Kolkata, Mumbai and Chennai on Sunday were Rs 63.84, Rs 65.76, Rs 66.93 and Rs 67.52 per litre, respectively, down from Rs 63.93, Rs 65.85, Rs 67.03 and Rs 67.62 a litre on Saturday.
The fall in domestic fuel prices came on the back of decline in global crude oil prices. Brent crude oil is currently priced at around $62 per barrel.
Delhi, Kolkata, Mumbai and Chennai saw a reduction of 5 paise/litre in petrol prices.
According to the Indian oil website, in Delhi, Kolkata, Mumbai and Chennai, the petrol rates were -- Rs 72.60/litre, Rs 75.32/litre, Rs 78.28/litre and Rs 74.45/litre respectively. The diesel rates in these metropolitan cities were -- Rs 65.75/litre, Rs 68.16/litre, Rs 68.96/litre and Rs 69.50/litre respectively.
The prices have been affected by the rise in the crude oil rates in the international market. Though on Monday, the petrol rates in the international market remained unchanged, the Brent crude oil rates were the highest in the past two months.
Accordingly, the petrol prices have been showing a surge with Delhi, Mumbai, Kolkata and Chennai seeing a hike of 16 paise/litre.
As per the Indian oil website, the petrol rates in Delhi, Kolkata, Mumbai and Chennai were Rs 74.05/litre, Rs 76.74/litre, Rs 79.71/litre and Rs 76.97/litre respectively. The diesel rates, which have remained unchanged for six consecutive days are -- Rs 65.79/litre, Rs 68.20/litre, 69.01/litre and 69.54/litre respectively.
Brent crude futures were down by 0.05 per cent, at $63.31 a barrel, which is the highest in the past two months.
West Texas Intermediate (WTI) crude was at $57.84 a barrel, 0.02 per cent higher than the previous session
As per the Indian oil website, the petrol rates in Delhi, Kolkata, Mumbai and Chennai were Rs 74.20/litre, Rs 76.89/litre, Rs 79.86/litre and Rs 77.13/litre respectively. The diesel prices were Rs 65.84/litre, Rs 68.25/litre, 69.06/litre and 69.59/litre respectively.
The West Texas Intermediate for December delivery slumped 1.84 US dollars to settle at 55.21 dollars a barrel on the New York Mercantile Exchange. Brent crude for January delivery was at $ 60.94 a barrel on the London ICE Futures Exchange.
In the international market, West Texas Intermediate (WTI) Brent crude futures rose by 0.31 per cent to $60.94 a barrel. The Brent crude futures were at $60.75 a barrel.
While the stock markets have taken a beating, gold, silver and oil prices have jumped sharply.
While a rush to buy safe haven assets over the rising West Asia tensions acted as support of gold and silver prices, worries over an oil supply disruption boosted oil prices. Besides, investors turning risk averse led to a stock market decline.
India's benchmark index, Sensex fell as much as 230 points as the global oil benchmark oil shot over 4 per cent to touch $70 a barrel. Besides, NYMEX crude rallied over 4 per cent on Friday to hit a high of $63.84/bbl, the highest level since May 2019.
The Indian rupee lost 34 paise to the US dollar and was trading at Rs 71.71 a dollar at 3 p.m.
On the MCX, gold contracts for February rallied nearly 2 per cent to trade at Rs 39,993 per 10 gram while silver also jumped over 1 per cent. COMEX gold rallied to hit a high of $1543.7/oz, the highest level since September.
Ravindra Rao of Kotak Securities said, "Crude oil prices might further move higher amid concerns about retaliatory moves by Iran. However, market reaction may subside if there is no retaliatory move by Iran or no major exchange of words between Tehran and Washington," Rao added.
Rao further noted that WTI crude oil is trading close to the resistance near $64/bbl. If the resistance holds, we expect a corrective dip in prices. On the contrary, if the price sustains above $64/bbl the upside might extend to $65.50/bbl.
"In case of gold, the immediate resistance is near $1546/Oz. On break of the resistance, the price might move close to the September 2019 highs of $1560/Oz," he said.
Analysts from Anant Rathi said that: "Adding to the geo-political tensions North Korea has given up hope on lifting of sanctions anytime soon as it looks to find a way to survive under crushing economic sanctions while building an even stronger nuclear powerhouse."
(IANS)
Petrol price was increased by 9 paise per litre and that of diesel by 11 paise, as per the information on the Indian Oil Corporation website.
Petrol now costs Rs 75.54 a litre in Delhi, Rs 81.13 per litre in Mumbai, Rs 78.13 per litre in Kolkata, and Rs 78.48 per litre in Chennai, after the increase.
Similarly, diesel prices cost Rs 68.51 a litre in Delhi, Rs 71.84 a litre in Mumbai, Rs 70.87 a litre in Kolkata, and Rs 72.39 in Chennai.
The rise in prices comes as global crude oil prices jumped after the US killed a top Iranian general Qassem Soleimani, triggering fresh fears of conflict in the Middle East.
Domestic petrol and diesel prices are reviewed by oil marketing companies on a daily basis. Price revisions are implemented at the fuel stations with effect from 6 a.m.
(IANS)
The fall in oil prices comes on the back of weak demand amid the coronavirus crisis. The pandemic has almost brought the global travel industry to a halt, limiting demand for the commodity which has fallen by almost a third this year. Further, concerns regarding storage have also weighed on the markets as global storage is nearly full.
Also Read: COVID-19: IMF, World Bank Urge Countries To Keep Trade Open
Currently, WTI crude is trading at $14.78 per barrel, lower by 19.5 per cent from its previous close. Brent crude was at $27.66, lower by 1.5 per cent from the previous close.
The decline comes despite the recent output cut agreement between the Organization of Petroleum Exporting Countries (OPEC) and its allies. There were hopes that agreement would stabilise oil prices, but with COVID-19 pandemic continuing, there has been a large slip-in demand that is not letting a pick up in oil prices.
The current market is oversupplied on shrinking demand creating a situation of free fall for crude.
Soon after the OPEC-Russia talks on production cut failed earlier last month, crude had fallen by more than 25 per cent, the largest fall since the 1991 Gulf War, to $34 per barrel on March 9.
The price of oil has now reached a point that it is increasingly becoming difficult for higher-cost producers to remain in operation and rather look at declaring bankruptcy. A lot of US shale producers are in deep trouble and analysts expect that low oil price for few more months will result in a spate of bankruptcies in the US.
Also Read: Chinese Investment Under Scanner As Govt Tweaks Law Post COVID-19
With world demand now forecast to plunge by over 20 million barrels per day, a 30 per cent drop from last year, analysts say massive production cuts will be needed beyond just what has been agreed between the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers.
Global markets have been on a bear run including the financial markets for the past few weeks owing to the concerns of a significant impairing of the world economy due to the coronavirus crisis.
(IANS)
According to provisional data from Petroleum Planning and Analysis Cell (PPAC), in FY20 India's oil import bill slipped to $ 101.4 billion from a level of $ 111.9 billion in previous fiscal FY19.
The lower import bill last year came even as the quantum of imports increased marginally to 227 million tonnes (MT) from 226.5 MT reported in the previous fiscal. The fall has come mainly on account of generally lower crude oil price in FY20 with the sharp decline of over 50 per cent witnessed in March.
The low oil price of around $20 a barrel in April, and expectation that crude may average between $30-40 a barrel in FY21, country's oil import bill could reach its all-time low levels in many many years in current fiscal. The potential is it could fall to $ 64 billion in FY 21, the same as FY 16 when crude prices slipped below $26 a barrel.
A one dollar fall in crude oil price results in reducing country's import bill by almost Rs 2,900 crore while a rupee fall in value of currency against dollar results in increased spending by up to Rs 2,700 crore.
"The oil imports bill may well fall below $ 100 billion this year as coronavirus could keep demand suppressed despite global effort to reduce production and reduce the level of over supplies in the market to stabilise prices. This could bring down the country's oil purchase bill sharply this year," said an oil sector expert asking not to be named.
While India imported crude oil worth $ 112 billion in FY 19, its import bill transited substantially lower in the previous three financial years with oil import bill standing at mere $ 64 billion in FY16 when oil prices slipped on over supplies, especially with the entry of US shale oil.
The lower volume of crude processing by fuel refiners is also expected to have an impact on the import bill.
For India, lower oil prices act as a big incentive as the country depends on imports to meet 86 per cent of its oil requirements. Lower import bill would also have a positive impact on the country's fiscal deficit that had already slipped from earlier targets in the wake on higher government expenditure this year to curb falling GDP growth.
The dependency of imported crude (on consumption basis), on the other hand, has increased from 82.9 per cent in FY18 to 83.7 per cent in FY19 and further up to 85 per cent in FY20 meaning we are producing less oil and depending more on imports to meet domestic requirements. This dependency has consistently increased in all five years of the Modi government.
Crude production in India has stagnated around 35 MT for the past decade. In FY19, domestic crude production has dropped to 34.2 MT from 35.7 MT in the previous year and it has further dropped to 32.2 MT in FY20. Despite the best efforts of the government, domestic oil production has not increased.
(IANS)
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