If fears about the Omicron variant of the virus that causes COVID-19 to persist, a fall in international crude oil prices could cut the cost of oil and diesel for customers in India and other nations.
According to Indian Express, the changes in crude oil rates might affect domestic fuel costs.
Fall of the price of Crude oils
Brent crude ended the month at $70.6 per barrel, down from $84.4 per barrel at the start of the month, marking the greatest monthly fall since the outbreak began in November.
Concerns that current vaccines may not be as effective as they have been for other variants in avoiding infection from the Omicron form have generated concerns regarding oil demand. The cost of Brent crude is currently around $70 per barrel.
The announcement by the United States, China, Japan, India, South Korea, and the United Kingdom of a planned coordinated release of emergency crude oil reserves has also helped to temper a year-long rally in crude oil rates, which nearly doubled to $85.5 per barrel in October from $43 per barrel in October 2020.
Late last month, the United States declared that it would release 50 million barrels of crude oil from strategic reserves to help lower crude oil charges.
How does it affect domestic prices of crude oil
India said it would release 5 million barrels of crude oil from strategic reserves, while the United Kingdom said it would release 1.5 million barrels.
Oil Marketing Companies (OMCs) would likely begin cutting petrol and diesel prices in accordance with international petroleum product prices if Brent crude prices remain unchanged. Because domestic prices are benchmarked to a 15-day rolling average of global petrol and diesel prices, the impact of changes in crude oil prices is often delayed.
However, since the beginning of the pandemic, oil marketing organizations have not closely followed worldwide benchmarks, and have at times held prices constant during moments of instability.