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3rd price hike in four days makes diesel costlier by 70 paise/litre

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Diesel became costlier by 70 paise per litre on Monday after state-run fuel retailers raised rates by another 25 paise, raising the retail price in Delhi to 89.32 per litre. This was the third such hike in the past four days as international crude oil prices head towards $80 a barrel amid rising demand and supply concerns, but insiders say hike in petrol prices are also in the pipeline.

Earlier, diesel prices had softened to 88.62 per litre after climbing to a record high of 89.87 in mid-July. The retail price of petrol in Delhi, however, has remained frozen at 101.19 per litre since September 5 despite volatility in international oil markets. It had touched an all-time high of 101.84 on July 17 and stayed there for 36 consecutive days. Subsequently, companies reduced the rate by 65 paise spread over four small cuts.

But public sector oil marketing companies (OMCs) are under pressure from the market forces to raise petrol rates also, two executives working in these firms said, requesting anonymity.

“The last increase in the retail sale price of petrol was carried out on July 17. However, with no respite from surging international prices, rise in retail prices of both petrol and diesel are likely in the coming days,” one executive with direct knowledge of the matter said.

There are indications that imported energy would be costlier, the two executives mentioned above said. “As per both IEA (International Energy Agency] and OPEC (Organisation of the Petroleum Exporting Countries), global demand is expected to outpace supply due to which international oil prices will likely remain firm in the near to mid-term. A simultaneous rally in natural gas is also likely to drive demand for alternative fuels, including crude oil,” the first executive said.

Benchmark Brent crude continued an upward movement in intraday trade on Monday with a gain of 1.83% at $79.52 a barrel.


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