As the Ukraine crisis spooked the oil market already struggling to meet rising demand, the global benchmark crude Brent raced towards the $100 per barrelmark. So, in India fuel prices go up by Rs 7 to 8 per litre.
Pump prices have remained unchanged. The sharp in- crease has widened the gap between the actual cost and retail prices of petrol and diesel. As per ballpark, every $1 increase in crude price impacts retail rate by 70-80 paise.
As Brent hit $98/barrel, the mix of crude bought by India, otherwise known as the Indian Basket, too rose to $93. 6, marking a $10 increase since November 4 when the Centre cut excise duty by Rs 10 on a litre of diesel and Rs 5 on petrol.
The Ukraine crisis will pinch India in gas prices too. India meets half its gas needs through imports by way of LNG or Liquefied Natural Gas.
Rising fuel costs will jack up inflation and may prompt hardening of monetary policy by the RBI.
