Petrol, diesel hit record highs on rising oil prices, falling Rupee

While OPEC and the US are expected to raise their output, the market was concerned over decline in supplies from Iran and other troubled markets including Venezuela, thereby pushing the Brent price to $78.15 per barrel on Monday.

Sensex, BSE sensex, Petrol price rise, diesel price rise, rising fuel prices, Rupee, Rupee vs dollar, Rupee against dollar, share market, india share market, business news, Indian Express news

Petrol prices in Delhi hit a high of Rs 79.15 per litre and stood at Rs 86.56 in Mumbai. Diesel prices also shot up to Rs 71.15 per litre in Delhi and Rs 75.54 in Mumbai.

Rising Brent crude oil prices over the expected fall in Iranian crude output later this year not only pulled the rupee down to an all-time low Monday but also lifted the domestic fuel prices to their all-time highs.

While OPEC and the US are expected to raise their output, the market was concerned over decline in supplies from Iran and other troubled markets including Venezuela, thereby pushing the Brent price to $78.15 per barrel on Monday.

The concerns pushed the rupee to a new low of 71.21 against the dollar. With crude prices expected to remain tight and no sight of any near-term respite for the domestic currency, the equity markets too gave in to the growing concerns and the Sensex fell 332 points or 0.86 per cent to close at 38,312.

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Domestic fuel prices too hit their all time highs across the country on Monday. Petrol prices in Delhi hit a high of Rs 79.15 per litre and stood at Rs 86.56 in Mumbai. Diesel prices also shot up to Rs 71.15 per litre in Delhi and Rs 75.54 in Mumbai.

Economists feel that if the situation remains as tight as it is now on both fronts, it would be inflationary in nature and RBI will have to respond with another rate hike in its forthcoming monetary policy review.

“With inflation already rising, especially on the non-food part for both the CPI and WPI, higher fuel prices will mean that the RBI would have to take action on interest rates and there would definitely be another rate hike of at least 25 bps,” said Madan Sabnavis, chief economist at Care Ratings.