Two good news have come from abroad, which can also have an impact on India. On the one hand, there has been a sharp decline in the price of Brent crude in the global market, while on the other hand, after the policy rate cut in Europe, the hope of a cut in interest rates by the US Federal Reserve has increased. Its signs have been received in the form of a boom in the stock market on Thursday. Actually, the change in crude oil affects the prices of petrol and diesel, while America cuts the policy rate, then in India too, there is a hope of relief to the loan takers in the festive season. That is, the Modi government can give two big gifts to the people of the country.
Crude at this level after 2021
First of all, let’s talk about the fall in crude oil prices at the international level and its impact on the prices of Petro-Diesel, so let us tell you that on Friday, the price of Brent crude is trading at $ 72 per barrel, while the price of WTI crude has come down to $ 69.27 per barrel. The price of crude has come to this level after the year 2021. If we look at the change in crude prices in a month, it has become cheaper by $ 20-25 per barrel.
Effect of crude prices on petrol and diesel
The prices of petrol and diesel in the country depend on many factors. Their prices increase and decrease every day. Along with this, these prices are different in every city. The reason for this change is the price of Brent crude oil in the international market, the excise duty levied on them in the country, VAT levied by the states. However, the price of Brent crude in the global market plays the biggest role in deciding the petrol-diesel price. If the price of crude falls, then there is a decrease in the price of petrol and diesel. However, it is not necessary every time that petrol and diesel also become cheaper after the crude oil becomes cheaper, but in most cases this is seen.
According to a report, India consumes about 37 lakh barrels of crude oil every day and we import about 80 percent of crude oil to meet our consumption. Oil marketing companies decide how much petrol and diesel will be cheaper or how much it will be expensive based on the price of crude oil, freight charge, refinery cost. Apart from this, excise duty, VAT and dealer commission also get added to its prices by the time it reaches the customer. It is clear that the local oil companies take the final decision on how much and when to change the prices of petrol and diesel.
Fuel will be cheaper during the festive season!
According to expert Anuj Gupta, if the price of crude oil increases by one dollar per barrel at the international level, then the price of petrol and diesel in the country is likely to increase by 50 to 60 paise. Whereas if there is a decrease of 1 dollar, then petrol and diesel may decrease in the same proportion. In such a situation, this hope is increasing at the moment and if the trend of decline in the international prices of crude oil continues, then the prices of petrol and diesel, which have been stable for about two years in the country, may see a change.
Rate cut in Europe, now eyes on America
Now let’s talk about the second relief hope, so it is related to the loan takers. In fact, on Thursday, the European Central Bank (ECB) took a big decision and cut the key interest rate (Policy Rate) by 25 basis points or 0.25 percent to speed up economic growth amid softening of inflation and reduced it from 3.75 percent to 3.5 percent. This has also increased the expectation of reduction in interest rates by the Federal Reserve in the US this month. In fact, the annual inflation rate in the US (US Inflation Rate) became 2.5 percent in August 2024, which was 2.9 percent in July.
The next meeting of the US Central Bank Federal Reserve (US Fed) is going to be held on 17-18 September and a decision to cut interest rates can be taken in it. If reports are to be believed, experts are expecting a rate cut of 25 basis points in the US as well. Now any financial movement in the US has a direct impact on India as well, on Thursday the impact of the indication of interest rate cut by the US Fed on the stock market was seen in the form of a boom. If this decision is taken in the US, then a cut in the repo rate is also being anticipated in India.
Why should loan takers expect relief?
As mentioned, any movement in America often has a direct impact on the Indian markets. The increase in interest rates by the Fed is also included in this. Due to relief in inflation rate in America, the Fed is predicting a cut in the Policy Rate, while in India too, there has been a slight increase in the inflation rate (India Inflation), but it remains below the limit set by the RBI. If we look at the data released by the government on Thursday, India’s retail inflation has increased marginally to 3.65 percent in August 2024.
Despite inflation coming under control, the policy rates (Repo Rate) have been kept unchanged at 6.5 percent in the last 9 MPC meetings in the country. Earlier, when inflation in the country became uncontrollable and crossed 7 percent. Then to bring it under control, RBI had continuously increased the repo rate. It was increased several times from May 2022 to February 2023 and it increased by 2.5 percent. Now that inflation has come down even below the limit set by RBI, there is hope of a reduction in it.
Follow us On Social Media Google News and Twitter/X