Oil Market

According to the ratings agency, the lagged revision in RSPs (retail selling prices) of MS (motor spirit) and HSD (high speed diesel) is warranted by current surge in crude prices at Rs 6-8 per litre. "The impact of the latter on RSPs and the CPI inflation can be absorbed by a roll back in excise duties on these fuels to pre-pandemic levels," ICRA Chief Economist Aditi Nayar said.

The price movement comes a day after the Russia-Ukraine war pushed Brent Crude Oil prices to $105 per barrel. Besides, Thursday was the first time since 2014 that crude oil prices crossed the $100 per barrel mark. On the NYMEX WTI index, crude oil prices surged by 5.50 per cent near $97.22 per barrel. Currently, Russia is one of the world's top producers of crude oil and any western sanctions against the country will stiffen the global supply.

The West Texas Intermediate for April delivery added 71 cents to settle at $92.81 a barrel on the New York Mercantile Exchange, after hitting a session high of $100.54. Brent crude for April delivery increased $2.24 to close at $99.08 a barrel on the London ICE Futures Exchange, after touching $105.77 earlier in the session.

Croft, a former CIA analyst, added that the size of the release will "likely be larger" than the one announced in November that provided just modest relief to American drivers filling up at gas pumps, the report said.Although emergency oil releases can help cushion the blow from supply shortages, they won't solve the underlying supply-demand imbalance that drove energy prices to seven-year highs even before the invasion of Ukraine.

On Thursday, Russian President Vladimir Putin announced a military operation in Ukraine. Besides, crude oil prices surged by 5.50 per cent near 97.22 per barrel on the NYMEX WTI index. Notably, Russia is one of the world's top producers of crude oil and any western sanctions against Russia will stiffen the global supply.

India is exposed on both inflation and current account fronts, Thailand is exposed via its current account but relatively less so on inflation, and in contrast, South Korea is exposed on inflation but not current account deficit. The Indian government could consider a reduction in fuel excise duty cut (Rs 5-10/lt).

The West Texas Intermediate for March delivery added 1.28 dollars, or 1.4 per cent, to settle at 92.35 dollars a barrel on the New York Mercantile Exchange, on its expiration day. Brent crude for April delivery increased 1.45 dollars, or 1.5 per cent, to close at 96.84 dollars a barrel on the London ICE Futures Exchange. The front-month contract of the international benchmark notched its highest finish since September 29, 2014, according to Dow Jones Market Data.

Accordingly, the Brent-indexed crude oil prices crossed $95 per barrel, the highest in several years. Crude oil prices inclined to a multi-year high level as Russian President Vladimir Putin ordered the deployment of troops into two separatist areas within Ukraine. On Monday, Russia recognised the two separatist regions' independence, a move that some fear puts Ukraine and Russia one step closer to a military conflict.

Notably, oil marketing companies have not increased retail prices of petrol and diesel since November 2021. However, the trend might change as high Crude oil prices have kept prices of key refinery-based products elevated in Q4FY22. At present, the Brent-indexed Crude oil is priced over $91 per barrel. Consequently, the Q3FY22 GRMs for Indian refining companies averaged at $9.4 per barrel Ain line with Singapore GRMs.

In the national capital, the price of jet fuel was raised to Rs 90,519.79 per kilolitre from Rs 86,038.16 per kilolitre. In the other metro cities of Kolkata, Mumbai and Chennai, the price was increased to Rs 94,888.70, Rs 88,987.20 and Rs 93,371.18 per kilolitre, respectively. The hike is expected to impact aviation companies' finances that are under huge stress amid high debt.