Mumbai : Oil cartel Opec’s decision to cut production from next month may lead to a 5-8 per cent spike in retail prices of fuel over the next three-four months and massively boost the margins of state-run refiners, says a report.
A Crisil report said the price of petrol may rise 5-8 per cent and that of diesel by 6-8 per cent over the next 3-4 months following the production cut and the resultant spike in crude prices.
It also sees a near doubling of gross refining margins (GRMs) of public sector refiners in the December quarter to USD 6-7 per barrel levels from USD 3.8 in the second quarter as the oil companies average prices for December delivery will be lower at USD 46 as was seen in November.
Last Wednesday, Organization of Petroleum Exporting Countries (Opec) had decided to finally to cut crude production by 1.2 million barrels a day.
In Mumbai, that would mean petrol price can top Rs 75 per litre compared to Rs 72 now, and diesel more than Rs 64 from Rs 60 at present, the report said, as the Brent crude may jump top USD 50-55 a barrel by March 2017, and if it surges to USD60, the price of petrol may touch Rs 80 and diesel Rs 68. production cut always lifts prices, but the success of the Opec agreement depends on adherence. Previously, there have been instances of members breaking away from the cartel because of domestic compulsions, the report noted.
