The Oil Marketing companies in India have got some respite with the global crude oil prices showing a downward trend. What this means for the man the street is that, a fuel price hike, which looked imminent a couple of weeks ago might not happen in the near future.
While the oil marketing companies still continue to bleed due to under recoveries on fuels like diesel, kerosene and petrol, they are doing so at a slower pace that they were when crude oil prices were at a heady $120 per barrel. Now that the crude prices have fallen to about $102, a fuel price hike isn’t likely in the near future.
That said, over the long term, consumers will still feel the heat of surging fuel prices as the Japan’s recovery from the recent earthquake and tsunami continues to gain momentum. Then, as the Japanese industrial output slowly limps back to normal, fuel prices might once again start shooting up on the back of crude oil prices showing an upward surge.
So, for now, you may breathe easy as state assembly elections for five Indian states are just around the corner. Hence, the government will stave off a fuel price hike until the elections are over as rising inflation is not exactly a nice phrase in any election manifesto.