Petrol could hit Rs 100 in states with high VAT as 3 Wall Street banks see oil at $70
There could be more bad news for fuel consumers who may not get any respite from flaring fuel prices in the near future. Three Wall Street banks – Goldman Sachs, Morgan Stanley and Bank of America – have forecast oil at $70/barrel in the next few months and even a spike to $75 thereafter.
In a sign of things to come, benchmark Brent crude on Tuesday hit $65.50/barrel on positive signals from the demand front, expectations of lower inventories and US production taking longer than expected to recover from the deep freeze. India’s crude (mix of Dubai-Oman and Brent) purchase cost stood at $62/barrel on Monday.
If oil prices follow the trajectory forecast by the investment banks, at $70/barrel of Brent, regular petrol would become costlier by at least Rs 2.75 a litre and diesel by, say, Rs 3 in Delhi, the reference market. The increase will be higher in states with heavier taxes.
This is because, industry analysts said, every dollar increase in crude price pushes up petrol price by 55 paise a litre and diesel by 58-60 paise (as per current taxes in Delhi).
