India is likely to witness a sharp hike in petrol and diesel prices after the conclusion of Lok Sabha elections 2019.
Market watchers expect oil marketing companies (OMCs) to significantly increase fuel prices after Lok Sabha elections.
Despite rising global crude oil prices, OMCs have not yet passed the buck to customers.
Most oil marketing companies have run into losses due to gradually rising crude oil prices.
Customers may have to deal with a daily hike after May 19
Trend-watchers from the oil sector say customers may have to deal with a daily hike after May 19, when the last phase of elections will be held.
Come May 2, India will not be able to import oil from Iran as a result of the fresh US order.
Analysts observing oil market trends say international crude prices will jump to 80-85 dollar/barrel in short-term after Trump’s fresh diktat.
The order could significantly disrupt importing needs of non-oil producing countries, added experts.
Iran is India’s third largest supplier of crude, but it is not just about the quantity of oil India imports from Iran.
The feed of a refiner is tuned to a particular type of crude and it cannot be changed at short notice.
Also, Iran used to offer India a longer credit line, besides shipping.
Iraq and Saudi Arabia, already India’s top two suppliers, have pledged more crude to the country.
That’s not all. The Saudi and Iraq offer comes with another catch. Suppliers are offering extra oil to replace Iranian oil, but they demand high prices for the same quality of sour crude.