Government is considering reduction in fuel prices, know the reason

Business: The central government is considering cutting fuel prices as crude oil prices have fallen to a nine-month low. The source said oil prices have fallen to their lowest level since January, improving the profitability of oil marketing companies (OMCs), which may provide relief to consumers. The move is also being seen in view of the upcoming Maharashtra and Haryana assembly elections. Inter-ministerial talks are underway and we are closely monitoring global developments, the source said.

US crude oil fell more than 1 per cent on Wednesday,

falling below $70 a barrel amid speculation that OPEC+ may defer production hikes scheduled to start next month, while Brent crude oil prices fell $1 a barrel to $72.75. The return of Libyan oil to the market, as well as the decision by the OPEC+ group to withdraw voluntary production cuts starting in October, and increased output from non-OPEC sources, have all contributed to easing pressure on prices. Goldman Sachs estimates that oil prices will fluctuate between $70 and $85 a barrel. Even if the current low prices are temporary, the government will be in a favourable position if prices stabilise around $85 a barrel. According to another source, this will enable the government to request state-owned retailers to keep retail prices stable. The Centre had last cut petrol and diesel prices by Rs 2 per litre on March 14, just before the general elections.