Hyderabad: Crude oil prices are sliding as the United States and European countries may increase the interest rates to fight against rising inflation.
Apart from it, restrictions imposed by China to adhere to its zero-COVID policy are further dragging crude oil prices.
Though OPEC counties and its allies including Russia last week decided to cut crude oil production by one lakh barrels per day from October onwards to counter the falling prices, it did not have much impact.
The price of Brent crude oil declined by over five percent in one month. In the last six months, it witnessed a fall of over 13 percent.
China’s oil demand to shrink
For the first time in two decades, China which is the largest consumer of oil in the world is likely to see a drop in old demand due to Beijing’s zero-COVID policy.
The policy of China is resulting in a fall in fuel consumption as people are staying at home and factories are remaining shut.
Due to the policy, many companies listed in Shanghai, Shenzhen, and Beijing have posted a decline in net profit. The profits are collapsing like in 2020.
Interest rates
The Federal Reserve of the United States and the European Central Bank are likely to increase the interest rates to counter the rising inflations.
Currently, the US and European countries are struggling to bring inflation under control in order to bring down the cost of living. Bringing down the cost of living is the top priority of the new Prime Minister of the United Kingdom Liz Truss too.
In view of this, the oil prices are sliding anticipating the fall in the demand for crude oil in the near future.
How it will impact fuel prices in India?
As India is one of the top importers of crude oil, the fall in the prices will act in its favour.
However, despite the fall in crude oil prices, the benefit has not been passed on to the consumer as the prices of petrol and diesel have not declined in India.
Current the prices of petrol and diesel per liter in New Delhi are Rs. 96.72 and Rs. 89.62 respectively. In Hyderabad, the prices are Rs. 109.66 and Rs. 97.82 respectively.
