(ET)
A 30% decline in oil prices since early June has brought relief to refiners, which had sold fuels at a loss to domestic customers for months, but is unlikely to lower consumer prices, said analysts and executives. Crude oil prices have fallen to $86 a barrel, from $124 on June 8, as fear of a recession in the developed world is swaying investors amid interest rate tightening by central banks.
“India may not get the full benefit of falling oil prices,” said Sunil Kumar Sinha, principal economist at India Ratings and Research, pointing to depreciation in the rupee that offsets the gain from lower oil prices and the likelihood of consumer fuel prices not falling. The government will allow refiners to absorb the gains from lower prices to make up for the losses they incurred for months by selling transportation fuels at below-market rates, said Sinha.
