Crude Oil drops 20% due to Corona, What benefits Indian consumers?

New Delhi, 6 February 2020, Saturday

China's crude oil and gas market is shrinking due to the outbreak of car viruses in China. Oil prices have dropped 20% and Liquid Natural Gas (LNG) prices have also reached record low levels.

Because of this, where oil and gas producers have been forced to lower prices, this has become a good opportunity for Indian consumers. Petrol and diesel are steadily getting cheaper as crude oil prices are falling, leaving them with more money for other expenses.

Let's understand where crude oil and natural gas prices have come in a month. On January 7, 2020, China announced the outbreak of the car virus. Ever since, it's been a while.

Crude oil prices have dropped 20%. Now, crude has reached Rs 55 per barrel, a reduction of $ 13. Speaking of LNG, it has dropped below $ 3 a mmBtu a month, with China returning shipments, which is why traders are looking for other markets.

Crude Oil Cheap, What Benefits for India?

1. Because of the cheap crude oil, the consumer will spend less on petrol and diesel, saving more money in his hands for other expenses.

2. Low crude oil prices are good in terms of current account loss, rupee and inflation rates.

3 Refiners may increase fuel prices to recoup the investment made in the BS.6 upgrade.

4 Fuel subsidies are expected to decrease.

5 Government may increase the duty to increase income.

6 LNG terminal operators can store cheaper gas at lower prices and sell it later.

One month after the outbreak of coronavirus, where did the price of petrol and diesel come from?

Since January 7, petrol prices have dropped by more than Rs 3, while diesel prices have dropped by almost the same.

What happens next?

JPMorgan believes the average price of crude oil for the year 2020 will be $ 60.40 per barrel. This estimate is $ 14.1 lower than previous estimates.

Decrease in production

OPEC, Russia and others are discussing reducing production. They plan to cut 600,000 barrels per day of production.