Crude shocks are back to pinch you

Crude woes are here again. The price of international crude for India has gone up by nearly $10 a barrel in the last two months.

India's crude oil basket stood at $62 a barrel on Tuesday, up 27 cents from Monday's close of $61.73 per barrel.

There was an increase of $1.03 per barrel on Monday from last Friday's $60.70 per barrel.

The average for the current month till date stood at $59.63 a barrel. In February, the Indian basket had averaged $56.53 per barrel compared with $52.53 in January.

Market analysts blamed tension in West Asia, Iran in particular, for fluctuations in international crude prices.

Further, crude is expected to be strong owing to the fact that only incremental supplies would now be available from the OPEC countries.

The Indian basket comprises Oman-Dubai sour grade crude and Brent dated sweet crude in 58:42 ratio. On Tuesday, the Dubai benchmark crude rose to $60.52 per barrel, up 73 cents, while the Oman benchmark rose 82 cents per barrel to $61.08. However, Brent crude closed at $63.78 per barrel on Tuesday, down 48

cents from a day earlier.

Experts in the field said unless the government continues support in the form of compensation packages such as oil bonds, the oil companies in India may have a cause for concern.

Indian Oil Corporation Ltd was losing Rs 60 crore per day on the sale of petroleumproducts without including the compensation package offered by the government. During the first fortnight of March the desired increase in the price of petrol is Rs 3.98 per litre and diesel is Rs 2.60 per litre. As on first March 1, the loss on sale of kerosene stood at Rs 12.73 per litre and on cooking gas Rs 173.25 per cylinder.

On February 15, the government had announced reduction on the retail selling prices of petrol and diesel by Rs 2 per litre and Re 1 per litre respectively mainly to curb inflation. The prices had been reduced taking the average of the Indian crude basket for the first fortnight of February at $56.12 per barrel.