OPEC and its partner countries have decided to maintain their current levels of reductions in oil production, while fuel demand has reached pre-covid levels.
In another jolt to the common man of the country, the Petrol-diesel prices may increase in the coming days. OPEC and its partner group of oil-producing countries have extended production cuts till April. In such a situation, fuel prices may increase even more if the central and state governments do not reduce tax. Some cities are already selling a litre of petrol beyond 100 rupees.
The OPEC decision to continue production cuts
OPEC and its partner countries have decided to maintain their current levels of reductions in oil production, while fuel demand has reached pre-covid levels. This led to a jump in crude oil prices in the futures market. Brent crude rose 4.2%, or $ 2.67 a barrel, to $ 66.74 on Thursday. Earlier, in January 2020 it was at the level of $ 67.75 per barrel. In the US market, crude oil futures climbed 5.6% to reach $ 64.70 a barrel on Thursday.
Saudi will continue to cut production, but Russia and Kazakhstan may increase
At an online meeting of OPEC’s partner oil-producing countries led by OPEC countries and Russia, the decision was taken to maintain the production cuts. Saudi Arabia, the world’s largest oil producer, will continue to cut 1 million barrels per day at least until April. However, Russia and Kazakhstan may increase oil production slightly.
Demand to bring petrol and diesel under the purview of GST
Shortly before this meeting, Petroleum Minister Dharmendra Pradhan had once again urged OPEC and other countries to lift the ban on crude oil production and fulfil the promise of price stabilization.
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Demand for bringing petrol-diesel in the country under the GST is arising, due to which the government is already under pressure. According to SBI economists, petrol will be down at a price of Rs 75 per litre and diesel at Rs 68 after coming under the purview of GST.
Estimates of $ 10 per barrel increase in crude oil prices
Last month, investment bank Goldman Sachs gave an estimate of an increase in crude oil. According to Sachs, by July this year, crude oil consumption will surpass pre-covid levels. This is because the industrial activity has been steadily increasing amid a decline in Coronavirus cases, while oil production cuts have continued on behalf of the oil-producing group OPEC + and Iran. In such a situation, crude oil can be more expensive by $ 10 per barrel.