Benchmark crude prices have settled a tad lower at $78 a barrel now after shooting over three year high level of $80 a barrel earlier this week.

 

With no change in fuel prices, diesel continues to be priced at Rs 89.57 per litre while petrol at Rs 101.39 a litre.

 

Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices on Tuesday given a spurt in the product prices lately.

 

OMCs preferred to maintain their watch on global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for last three weeks. But extreme volatility in global oil price movement has now pushed OMCs to effect the increase.

 

The wait and watch plan of OMCs had come to the relief of consumers earlier as no revision came during a period when crude price were on the rise over shortfall in US production and inventories and a peak in demand. This would have necessitated about Rs 1 increase in price of petrol and diesel.

 

In Mumbai, the petrol price is now Rs 107.47 per litre while diesel rate is Rs 97.21 a litre.

 

Across the country as well petrol and diesel prices remained static on Wednesday but their retail rates varied depending on the level of local taxes in the state.

 

Fuel prices in the country have been hovering at record levels on account of 41 increases in its retail rates since April this year. It fell on few occasions but largely remained stable.

 

On Wednesday, global benchmark Brent crude fell to $78 a barrel after rising over $80 barrel on Tuesday. Oil rates are up 2 per cent for the week and this is the fifth weekly gain.

 

Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market have been higher by around $6-7 per barrel as compared to average prices during August.

 

Under the pricing formula adopted by oil companies, rates of petrol and diesel are to be reviewed and revised by them on a daily basis. The new prices becomes effective from morning at 6 a.m.

 

The daily review and revision of prices is based on the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.

 

But, the fluctuations in global oil prices have prevented OMCs to follow this formula in totality and revisions are now being made with longer gaps. This has also prevented companies from increasing fuel prices whenever their is a mismatch between globally arrived and pump price of fuel.