Petrol, diesel prices see steepest hike since July 5

Petrol and diesel prices were on Wednesday hiked by 24-25 paise per liter, the steepest increase since July 5 Union Budget, as a fallout of turmoil in global oil markets following drone attacks on Saudi Arabian crude oil facilities. Petrol price was increased by 25 paise per liter to Rs 72.42 and diesel by 24 paise to Rs 65.82 in the Delhi market, which is sort of a national benchmark, according to price information available from state-owned fuel retailers.

This is the biggest single-day hike since the July 5 Budget of Finance Minister Nirmala Sitharaman that raised rates by almost Rs 2.50 a liter due to an increase in excise duty on the fuels. The hike on Wednesday followed a 14 paise a liter increase in the price of petrol on Tuesday and 15 paise per liter rise in diesel rate.

Following the drone strikes on Saturday, international oil prices rallied nearly 20 percent on Monday in intraday trading -- the biggest jump in almost 30 years -- as the attacks halved Saudi Arabia's output. Rates have in subsequent two days retreated, conceding about half of the gains. Brent crude future on Wednesday dipped 0.26 percent to USD 64.38 per barrel after jumping to near USD 72 in reaction to the disruption. US West Texas Intermediate (WTI) crude lost 0.5 percent to USD 59.06 per barrel.

This came after signs that Saudi Arabia was quickly restoring production at Abqaiq facility. Abqaiq is now processing about 2 million barrels a day and should return to pre-attack levels of about 4.9 million barrels by the end of September, Saudi Aramco chief executive Amin Nasser said.

Saudi Crown Prince Mohammed bin Salman has reportedly stated that two-thirds of production has been restored and the kingdom sees a full recovery in 10 days. Oil Minister Dharmendra Pradhan on Tuesday said India, the world's third-largest oil consumer, is keeping a close watch on the developing situation.

India imports 83 percent of its oil needs, with Saudi Arabia supplying a fifth of these. Saudi Arabia is its second-biggest supplier after Iraq. It sold 40.33 million tonne of crude to India in 2018-19 fiscal, when the country had imported 207.3 million tonnes of oil.