Hyderabad: India may witness a rise in petrol prices in the coming months as Goldman Sachs has predicted that oil price is likely to reach $100 per barrel this year.
The Goldman Sachs analysts predicted that oil price per barrel will cross the $100-mark in the third quarter of 2022.
In the international market, the oil price reached the highest level since 2014 on Wednesday. Last time, the oil price has dropped when the news of the Omicron variant of coronavirus triggered fear.
Soon after the realization that Omicron, while fast-spreading, is not going to leave any significant impact on business and travel, the oil price began climbing in the global market.
On Friday, the cost of global benchmark Brent crude was $87.90 per barrel.
Reason for rise in oil price
While demand remains the same, the production decreased recently thereby causing a mismatch between demand and supply.
The OPEC+ countries, oil-producing nations, have delivered less number of barrels when compared to the demand because of outrages and geopolitical tensions.
Nigeria, Ecuador, Libya, and Kazakhstan who are OPEC+ countries have witnessed outrages whereas the United Arab Emirates became victim of drone attacks on oil facilities. Meanwhile, tensions are also prevailing between the US and Russia.
Impact on petrol prices in Hyderabad, other cities
The rise in oil prices in the global market will result in an increase in petrol and diesel prices in Hyderabad and other cities in India.
Currently, the prices of petrol and diesel in Hyderabad are Rs. 108.2 and Rs. 94.62 per litre respectively. The prices have not witnessed any rise after the Central government’s decision to cut the excise duty.
Cities Petrol price per litre Diesel price per litre
Hyderabad Rs. 108.20 Rs. 94.62
Delhi Rs. 95.41 Rs. 86.67
Mumbai Rs. 109.98 Rs. 94.14
Kolkata Rs. 104.67 Rs. 89.79
Chennai Rs. 101.40 Rs. 91.43
OPEC+ countries will take steps to ease oil price
Despite the benefit from the rising oil price, the OPEC+ countries are bound to take steps to ease oil prices after a certain level because of two major reasons.
One, the rise in oil price will lead to a burden on the Americans’ pockets and that may strain the relations of Washington and Riyadh. In the current situation in the Middle East, Saudi Arabia will never take any step that may deteriorate relations with the US.
Apart from geopolitics, there is a business angle too. If OPEC+ countries did not take any step to ease oil prices, the shale gas demand will increase.