Oil companies have reduced diesel prices by 63 paise per litre (8.33%) since September 2, bringing down its rate to Rs 72.93 on Saturday in Delhi as international crude oil prices softened over 10% during the period because of a rise in the global stockpile and weak demand. Petrol rates have been cut by 22 paise a litre that brought down its retail price to Rs 81.86 in Delhi on Saturday.
The difference in quantum of decline in pump prices of petrol and diesel is mainly because their rates are aligned with respective international benchmarks that often do not move synchronously, two executives working for different state-run oil marketing companies (OMCs) said, requesting anonymity.
State-run fuel retailers revise pump prices of auto fuels daily based on fluctuations in their international benchmark rates. India’s fuel retail market is dominated by three state-run OMCs – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). They have almost 90% market share.
Benchmark Brent crude fell $39.83 a barrel on Friday because of weak demand. It slipped below $40 a barrel for the first time since June 15. Reuters reported on Saturday that the US stock markets ended lower for a second week following several economic indicators that suggest a long and difficult recovery from the Covid-19 pandemic.
One of the executives cited above said the falling international oil prices also helped state-run OMCs in reducing retail prices of subsidized kerosene sold through the public distribution system (PDS).
The retail selling price of PDS kerosene was reduced by Rs 0.69 per litre in Kolkata. There was a corresponding reduction in prices in other cities effectively from September 1, the executive said.
“This decrease is due to a drop in product prices in the international market and the strengthening of the rupee-dollar exchange rate,” he said. With this revision, the retail price of PDS kerosene was reduced from Rs 28.66 per litre in August to Rs 27.97 in September in Kolkata, he added.
Public sector oil companies revise kerosene rates every month.
The rupee-dollar exchange rate has a significant bearing on domestic fuel rates as India imports more than 80% of crude oil it processes and pays in dollars. Every dollar per barrel drop in crude prices reduces India’s import bill by Rs 10,700 crore on an annual basis.
According to the oil ministry’s data keeper, Petroleum Planning and Analysis Cell, the exchange rate fell to Rs 73.35 a dollar on September 11 compared to Rs 74.77 on August 3.
Harley-Davidson in talks with Hero for sales tie-up in India.
Harley-Davidson fans may still be able to buy the iconic bikes in India—their American maker is in advanced talks with Hero MotoCorp Ltd for sales, distribution and services in India, three people aware of the matter said.
According to these people, who asked not to be named, the deal may also include local assembly and production of select Harley models such as the Street 750 at one of Hero’s manufacturing units. Harley-Davidson, which has been in talks with India’s largest two-wheeler manufacturer for more than a year now, is aware that its plan to completely withdraw from the subcontinent would damage the brand, leading to unacceptability in the market in the future, industry executives said.
Announcing additional restructuring plans to its employees in the US on Thursday, Harley-Davidson Motor Co. said it has approved actions that involve optimizing its global dealer network, exiting certain international markets, and discontinuing its sales and manufacturing operations in India.
“The Harley-Davidson dealer network will continue to serve customers through the contract term,” it said. “It does not make much sense for Hero MotoCorp to settle down with a plain distribution and sales arrangement with them as it has its own well-established network across India. The arrangement, if it gets finalized, will include areas where Hero can benefit. It could be knowhow of quality and assembly of big bikes,” said a senior industry executive, requesting anonymity.
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